EUR / GBP falls sharply on comments from BoE’s Saunders

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  • The pound shoots up in the market due to comments from a BoE official.
  • EUR / GBP loses fifty pips in a few minutes.

EUR / GBP went from trading near 0.8570 to plummeting to 0.8510, very close to 0.8500 and Wednesday’s low. The cross abruptly changed direction from six-day highs, following comments from a Bank of England official.

Michael Saunders said it might be appropriate to reduce some of the monetary stimulus soon. This is generating a change in the policy expectations of the Bank of england. The next meeting of the Monetary Policy Committee is becoming more relevant and expectations for a change in future orientation are growing.

The latest data showed a larger than expected rise in inflation in the UK and a positive employment report on Thursday.

The EUR / GBP bias remains bearish and could test the 0.8500 zone. The break of this level would enable more lows. To the upside, a return above 0.8540 would ease the downward pressure. While above the next resistance is around 0.8560 / 70. If I broke this level, the euro would be strengthened.

Technical levels

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