EUR / GBP has lost 20 pips from the intraday high of the European open at 0.8499 to the new four-month low at 0.8479 reached a few minutes ago. This is the lowest level the pair has reached since April 5.
Against the background of the downtrend of new COVID-19 cases in the UK, the Bank of England’s hint of a modest adjustment acted as a tailwind for the British pound. The BoE indicated on Wednesday that it would begin to reduce its quantitative easing when the benchmark rate reaches 0.5% compared to the previous guidance of 1.5%.
Subtle changes indicate that the adjustment may occur more quickly than previously anticipated. The UK central bank also improved forecasts for short-term GDP growth and inflation. This was seen as another factor supporting the GBP, although a modest strength in the US dollar limited gains.
Meanwhile, the emergence of some new purchases around the US dollar put some downward pressure on the shared currency and contributed to the continued decline in the EUR / GBP pair. Aside from this, the decline could be further attributed to some technical selling after the previous day’s close below the 0.8500 mark.
There are no important economic data that could move the pair to be published on Friday, neither from the Eurozone nor from the United Kingdom. Therefore, it remains to be seen whether the EUR / GBP cross is able to attract some buying to lower levels or weaken further below April lows, around the 0.8470 region, to confirm a further bearish breakout. .
Technical levels
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