Forex: EUR/GBP erases gains after BoE inaction

FXstreet.com (Barcelona) - Following the retracement from 0.8521 highs on disappointing Services PMI in Europe, the EUR/GBP found support at 0.8478 low and then moved above the 0.8500 mark ahead of the BoE decision. The cross eased back to the opening price at 0.8490 after the announcement of an unchanged stance, with rate at 0.5% and QE at £375B.

Still ahead is the ECB decision. While analysts expect an unchanged policy, there is much curiosity regarding Draghi’s press conference after the unemployment rate at 12%, weakening activity data and the Cypriot situation.

“The support at 0.8410 (38.2% retracement of the rise from 0.7755) has thus far held and the hourly resistance at 0.8499 (26/03/2013 high) has been broken. A longer bounce is favored as long as the support at 0.8469 (03/04/2013 low) holds”, wrote MIG Bank analyst Bijoy Kar, pointing to resistance at 0.8561 (25/03/2013 high) and at 0.8602 (20/03/2013 high).