- Bank of England raises interest rate by 50 basis points.
- The pound loses strength decision and minutes.
- EUR/GBP with dominant bullish trend, correction loses strength.
EUR/GBP turned positive after the Bank of England decision and minutes. The cross rose from 0.8690, the lowest level in a week, and rose as high as 0.8752. It is trading around 0.8740, slightly higher for the day.
The Bank of England (BoE) did not surprise with the rise of 50 basis points although there were those who warned of the possibility of a higher rise. The “hawkish no surprise” weighed on the pound, which lost ground moderately after the meeting and the minutes.
The vote was not unanimous. Among the members of the Monetary Policy Committee, five voted for the rise of 50 basic points, three members asked for one of 75 points and one for one of 25 points. Where there was total agreement was to start selling bonds at the beginning of October
The dominant trend remains bullish for the EUR/GBP although In the very short term, the correction still has room to continue, as long as the price is not confirmed back above 0.8750.. The week’s retracement comes from a one-year high near 0.8800. In the event of a consolidation below 0.8710, the pound could go looking for 0.8690. The next strong support is seen at 0.8660.
Technical levels
Source: Fx Street
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