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The EUR to GBP (EURGBP) pair declined today as investors reacted to the UK inflation data and actions by the European Central Bank (ECB). UK Inflation Data The UK released its March inflation data earlier today. According to the Office of National Statistics (ONS), the country’s headline inflation rate declined slightly to 1.5% from the previous 1.6%. The weakness was mostly because of the sharp decline in fuel and clothing prices. The former was because of the overall weakness in the price of crude oil while. The latter was mostly because people were not interested in buying apparel and accessories during the lockdown. The rate of inflation was boosted by the rising prices of electricity and water. The core CPI, which is closely watched declined from the previous 1.7% to 1.6%. This number usually excludes the food and energy products that are considered volatile. It is the number that the Bank of England watches closely. ECB Actions The ECB has responded significantly to the current coronavirus pandemic. The bank left interest rates in the negative territory and announced a €750 billion-euro quantitative easing program. This is the highest QE the bank has implemented. According to the Financial Times, investors hope that the bank will do more especially about Italy. These actions are mostly because of the surging borrowing costs for the country. For example, its 10-year government bond yield jumped to above 2 per cent for the first time in a month. At the same time, its spread with the German bonds rose to 2.6 per cent. This is the close it has come since March, when the country was seeing more deaths. Therefore, analysts hope that the ECB will intervene, using measures such as an extra quantitative easing. In a recent blog post, Christine Lagarde of the ECB said that, “not tolerate a procyclical tightening of financing conditions amid one of the greatest macroeconomic cataclysms of modern times”. This sent a signal that she was prepared to do whatever it took to prevent another debt crisis. Download our Q2 Market Global Market Outlook EUR to GBP Technical Outlook The EURGBP pair declined from the previous high of 0.8863 to an intraday low of 0.87800. Looking at the hourly chart, we see that the pair is between the 50% and 38.2% Fibonacci Retracement level. This retracement is drawn by connecting the highest point yesterday and the lowest point on April 17. This price is also along the 50-day exponential moving averages but slightly lower than the 25-day EMA. The current trend is bearish, and I expect the pair to continue falling and possibly test the 50-day EMA 0.8770. The pair will remain in a downward trend provided it can manage to move below this EMA level.