- 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.