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EUR/GBP strong after ECB deposit rate cut

FXStreet (Mumbai) - The EUR/GBP spiked to a high of 0.7143 on rumors the ECB left rates unchanged, but fell back to 0.7100 after the European Central Bank cut deposit rate by 10 basis points as expected, only to rise again to near 0.7120 levels.

Eyes Draghi’s Presser

An early leak by FT that the ECB has left key rates unchanged saw the EUR/GBP recover from the low of 0.7060 to 0.7143. However, the official ECB statement carried a cut in the deposit rate as expected to -0.30%, while the Refi rate and the Marginal lending facility were left unchanged at 0.05% and 0.30%.

The focus now shifts to the ECB Draghi’s press conference, where the President may throw a light on whether the bank intends to tweak its QE program.

EUR/GBP Technical Levels

The immediate resistance is seen at 0.7145 (61.8% of 0.6930-0.7493), above which the cross could test 0.7176 (38.2% of 0.7493-0.6981). On the other side, a break below 0.71 would open doors for a re-test of 0.7045 (daily low).

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