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Forex: EUR/GBP bids 0.8395/0.8405 supporting the pair

FXstreet.com (London) - The EUR/GBP has remained well supported at 8395/8405, ticking up higher in todays European morning to a high 0.8424 after a turbulent time of late, shedding lots of weight well below previous cloud resistance levels 85.40.

More Dovish comments by ECB’s M.Draghi yesterday had dragged the cross to fresh intraday lows in the proximity of the 0.8400 figure.

“We look for further losses to 0.8363 and then the 0.8290 2012-2013 uptrend”, wrote Commerzbank analyst Karen Jones

With a light calendar, it might be expected that traders will be holding out now until the BoE interest rate decision at 11GMT on Thursday 9th for more dovish remarks when the European Central Bank publishes a monthly report that contains a detailed analysis of the prevailing economic situation and the risks to price stability.

In light of the BoE MPC meeting, Senior Economist Richard Barwell at RBS commented, “We expect the MPC to maintain its monetary policy settings in May... We have been sceptical for some time about the likelihood of a QE extension in May and the probability of policy easing has diminished following the resumption of GDP growth, marginally better survey data, and the extension of the Funding for Lending Scheme (FLS)”.

Bids are seen at 0.8395/05 with sell stops through 0.8390 (Jan 24 low 0.8391) ahead of support 0.8365 which are the lows of 22 Jan, 61.8% of the year’s rise.

The initial resistance lies 8440, yesterdays high and then at 0.8455 (high May 3) followed by 0.8469 (MA10d) and then 0.8493 (MA30d).

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