- EUR/GBP extends Thursday’s gains and approaches 0.8700.
- The Bank of England kept its interest rate unchanged at 5.25% on Thursday.
- The next bullish target for the pair is the 200-day SMA at 0.8709.
The British pound gives ground and lifts EUR/GBP to fresh two-month highs just below the round 0.8700 level on Thursday.
EUR/GBP moves higher after BoE surprise
The cross gains bullish momentum due to the strong selling pressure around the Pound sterling, all after the Bank of England caught the markets off guard and kept its monetary policy rate unchanged at 5.25%, compared to expectations of a rate increase of 25 basis points.
According to the central bank statement, further tightening could be necessary if inflation persists. In addition, the bank revises its GDP forecasts downwards and sees an expansion of the economy of 0.1% in the third quarter, from 0.4% previously.
On the other hand, the decision to maintain the official interest rate at 5.25% had the support of the members of the Monetary Policy Committee Bailey, Broadbent, Dhingra, Pill and Ramsden, while their colleagues Cunliffe, Haskel and Mann were supporters of a rate increase of 25 basis points.
EUR/GBP Key Levels
At the time of writing, the EUR/GBP cross is gaining 0.54% on the day, trading at 0.8682. It faces the next hurdle at 0.8700 (July 19 high) followed by 0.8709 (200-day SMA) and 0.8875 (April 25 high). On the other hand, a break of 0.8586 (55-day SMA) would expose 0.8523 (September 5 low) and finally 0.8492 (Aug 23 low).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
