The Bank of England will release the minutes from its most recent monetary policy meeting later today. The central bank left interest rates unchanged at 50 basis points earlier this month.
According to Kathy Lien, Director of Currency Research at GFT: “EUR/GBP will be our currency pair in play for the next 24 hours. We are expecting German producer prices at 2:00AM ET/ 6:00 GMT, followed by EZ consumer confidence at 10:00AM ET/ 14:00 GMT. The MPC meeting minutes published at 4:30AM ET/ 8:30 GMT should dictate much of the sentiment in the British pound.”
At present, EUR/GBP is ranging in Asia between 0.8790/0.8760, last quoted near its opening price in the 0.8775 zone.
To the downside, “if the pair declined amid a more hawkish mood from the Bank of England,” says Ms. Lien, the 50% Fibonacci level of the rally between 0.8328/0.9081 would provide support at 0.8683. Below there, she suspects the pair could encounter buying interest at a swing low in May, at 0.8610. To the upside, resistance lies at 0.8800 (psychological), “a level where the 100-day SMA and first Bollinger Band converge,” explains Ms. Lien. Above there, next major resistance lies at its 20-day SMA, 0.8904.
