EUR/GBP came under pressure during Asian trade, with a UK clearer and US names noted sellers in early trade as the stg0.8000 barrier was targeted. Rate posted fresh 42-month lows at stg0.8001 before recovering. This move acted to take cable from an early pullback low of $1.6128 (NY close $1.6135) to session highs of $1.6151. The recovery in the cross back to its opening levels around stg0.8020 allowed cable to slowly step its way down to session lows of $1.6124 before it settled back between $1.6135/45 ahead of the European open. UK seen taking centre stage this morning, release of UK IP/mfg data at 0830GMT precedes the focal BOE MPC rate decision at 1100GMT. Most expect unchanged rates/QE. There is expected to be an accompanying comment on QE following the end of the recent QE cycle. Some suggest we could see a small extension in QE in Sep after disruption from the Olympics has abated (HSBC comment). Cable offers remain in p[lace between $1.6150/60, a break to open a move toward $1.6180/85 ahead of $1.6200. Support $1.6124 ahead of $1.6110/00 ahead of $1.6088 (76.4% $1.6067/1.6154).
EasyForexNews Research Team