EUR/GBP bulls regain control, retake 0.8900 mark and beyond during Carney’s post-meeting presser

   “¢   BoE signals no rush for next hike and prompts some aggressive GBP selling.
   “¢   Carney comments on Brexit uncertainties provide an additional boost.  

The EUR/GBP cross quickly reversed the post-BoE knee-jerk slide to over two-week lows and rallied around 70-pips in the last hour.

The cross initially dropped to 0.8855 level in reaction to the BoE’s surprisingly unanimous decision to raise its key lending rate by 25 bps to 0.75%. The downtick was quickly bought into the UK central bank signalled that it was in no hurry to raise them further.  

The accompanying statement revealed that the central bank saw inflation only a fraction above its 2% target over the next few years, clearly suggesting that any subsequent interest rate hikes will be gradual and limited.

Adding to this, the BoE Governor Mark Carney‘s comments at the post-meeting press conference, highlighting Brexit risks on business investment, prompted some aggressive selling around the British Pound.

The cross surged past the 0.8900 handle and also previous session’s swing high, albeit a heavily offered tone surrounding the EUR/USD major did little to lend any additional support and now seemed to cap further gains, at least for the time being.

Technical levels to watch

A follow-through buying has the potential to continue boosting the cross towards weekly highs resistance near the 0.8935 region en-route the 0.8955-60 supply zone. On the flip side, any weakness back below the 0.8900 handle now seems to find a strong support near the 0.8880 horizontal zone, which if broken might negate the bullish bias.