- EUR/GBP”s upside capped at 0.9065, returns to 0.9000.
- The pound picks up after BoE’s monetary policy decision.
Euro’s rally from 0.8945 low hit resistance at 0.9065 area on Thursday’s European session and the pair has traded lower ever since, returning to levels right above 0.9000 and turning negative on daily charts.
Pound picks up after BoE’s decision
The pound has regained lost ground despite the Bank of England’s decision of ramping up its bond-buying program by £150 billion increasing the total target to £895. Although the bank has signalled to further support, the QE increase has been less than the £200 billion suggested by some market reports while the issue of negative rates has been left aside.
The common currency jumped higher on Wednesday, as the EUR/USD rallied on the back of the blue shift in the US presidential elections. Biden’s lead over Trump on the race to the White house boosted appetite for risk increasing demand for the euro against a weakening US dollar.
Furthermore, the Sterling was hit by the standstill at the Brexit negotiations after UK representative, David Frost reiterated the postures are still far away in key issues. This has cooled down hopes of an imminent trade deal although the talks are expected to continue in London over the weekend, which keeps the doors open for a last-minute agreement to avoid an unorderly exit and protects the pound from dropping further.
Technical levels to watch
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