The EUR to GBP continues lower for the fourth consecutive day as the pair corrects from seven-month highs. The British pound is under selling pressure amid the coronavirus outbreak as investors worry that the government respond too late in adopting strict measures to contain the virus spread.
After reaching the recent high at 0.95, the EURGBP retreated to 0.905 zone after the Bank of England injects liquidity into markets. Yesterday, BOE left interest rates unchanged at 0.10%. The quantitative easing program remained at 645 billion. According to the Monetary Policy Committee, the positive effect of the QE program still needs time to implement, and it will not be reasonable to reduce it now. BOE also noted that is ready to respond further as necessary to guard against an unwarranted tightening in financial conditions and support the UK economy. BOE cut interest rates to 0.1% at two emergency meetings in the last two weeks. That is the lowest interest rates have ever been in the Bank of England’s history. On the data front, the UK Core Retail Sales fell to 0.5%, below the forecasts of 1.1%.
ECB also announced an extensive QE programme and held the interest rates unchanged. ECB will purchase corporate, and government bond’s up to 750 billion in an emergency move to combat the coronavirus outbreak impact.
EURGBP is 0.05% lower at 0.9035, as the correction from recent highs continues for the seventh day in a row. The moving averages indicate a long-term bullish trend despite the recent correction. What can cancel the bullish momentum is a close below the 0.90 mark.
On the upside, first support for EURGBP the pair stands at 0.9003 the daily low. A move below might test the next support at 0.8982 the low from March 16. More bids might emerge at 0.8844 the low from March 13th trading session.
On the other hand, initial resistance stands at 0.9092 the daily high. A credible break above might challenge the next resistance at 0.9242 the high from March 26tt session. A break above that resistance might test the next hurdle at 0.9321 the high from March 24.