EUR/GBP drops to 0.8420 on steady BoE

• EUR/GBP moves lower and reaches 3-day lows near 0.8420.
• The BoE kept the refi rate unchanged at 0.75%.
• Attention is now on Governor M.Carney’s press conference.

The renewed and strong rebound in the sterling following the BoE interest rate decision has dragged EUR/GBP to fresh lows in the 0.8420 region.

EUR/GBP weaker post-BoE

The European cross has tumbled further and printed fresh 3-day lows in the vicinity of 0.8420 after the Bank of England kept the policy rate unchanged at 0.75% along with the assets purchase facility at £435 billion and corporate purchases at £10 billion.

Further support for the quid came after MPCs voted 7-2 favouring the current status quo. In addition, the ‘Old Lady’ now sees the jobless rate at 3.7% in two-year’s time and it revised lower its forecasts for GDP growth for the next periods.

The central bank considers the risks to the economic outlook as ‘broadly balanced’, while it expects the UK and the EU to clinch a deep trade deal.

Later in the session, Governor M.Carney will hold a press conference. On this side of the Channel, advanced German inflation figures for the current month will keep the attention on the euro.

EUR/GBP key levels

The cross is losing 0.33% at 0.8426 and a breakdown of 0.8385 (2020 low Jan.24) would expose 0.8275 (2019 low Dec.13) and then 0.8248 (monthly low July 2016). On the other hand, the next up barrier lines up at 0.8487 (weekly high Jan.30) seconded by 0.8500 (55-day SMA) and finally 0.8595 (2020 high Jan.14).