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EUR/GBP rebounds to 0.7850

FXStreet (Edinburgh) - After challenging the 0.7800 key support, EUR/GBP has now reverted the decline and is posting fresh session highs in the 0.78500 neighbourhood.

EUR/GBP boosted by BoE

The renewed weakness around the pound is allowing the current rebound in the cross following the key BoE’s Quarterly Inflation Report. The central bank remained apathetic regarding the first rate hike, although it stressed that inflation risks are broadly balanced and expectations anchored. The BoE also revised lower its GDP growth forecast for 2015 to 2.9% from 3.1%, mainly due to the euro zone fragile condition. On the critical wage growth subject, Carney argued its recovery will continue pari pasu with the improvement in the labour market.

EUR/GBP relevant levels

As of writing the cross is up 0.08% at 0.7844 with the immediate resistance at 0.7864 (high Nov.6) followed by 0.7875 (21-d MA) and finally 0.7885 (high Oct.31). On the downside, a breach of 0.7799 (low Nov.6) would open the door to 0.7791 (low Oct.2) and then 0.7767 (2014 low Sep.30).

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