EUR/GBP is now rising strongly, after the British rate decision, and asset buying decision.. Trichet’s upcoming rate decision probably might reverse this move..
Today, central banks in Britain and in Europe are making rate decisions. The Bank of England has kept interest rates at 0.5%, as expected. This historic low will be kept for the meantime. The big news is the increase of the size of the asset buying plan. The BoE plans to spill an addition 50 billion Pounds.
The upcoming rate decision by the ECB will be very interesting to watch. Most European figures have continued to be gloomy. In the ECB Press Conference, Jean-Claude Trichet may continue to stress the weakness of the economies in Europe.
EUR/GBP may reverse it’s trend after these events. This pair is very interesting to watch due these decisions, that are published very closely.
If Trichet makes a bullish statement, the next resistance line is at the round number of 0.9. If the trend changes, the next support line for the EUR/GBP is 0.8637, which ws the low point in February 10th. Afterwards, it’s 0.8234, where the EUR/GBP dropped on November 28th, before rising high in the sky.
This pair is quite stable at normal times. I ranked it number 2 in the list of most predictable forex pairs. But on a special day like today, with rate decisions in both banks, wild moves aer happening. Volatility gets stronger when there are surprises….Hold tight!