EURGBP turned higher after the announcement of the Bank of England decision and statement. The Bank of England kept the interest rates unchanged at 0.10% as was expected by markets and also kept the Asset Purchase Facility at £745B.
BOE said that the consumption is at around the start of the year levels, and the bank will continue to review all possible actions. The MPC also discussed the effectiveness of negative rates. Bank of England does not intend to tighten monetary policy until there is clear evidence of eliminating spare capacity and inflation reach the 2% target.
The central bank also warned that there is a risk of a more continuous period of elevated unemployment after the expiration of the job support schemes. BOE said that the recent economic data came in a little more robust than the expectations.
UK Unemployment Rate at 4.1% – Inflation Slowed Down In August
The UK Unemployment Rate increase to 4.1% in July in line with forecasts. The previous month reading was at 3.9%. UK Consumer prices slowed down to 0.2% in August, compared with a rise of 1.0% in July. The Producer Price Index – Output came at 0% in August below the estimates of 0.2%. The Producer Price Index – Input reported at -0.4%, below the forecasts of 0.3%.
European CPI In Line With Expectations
European Monetary Union annual Consumer Price Index in August came in at -0.2% in line with expectations. The monthly CPI came down to -0.4% also in line with forecasts. The European Monetary Union CPI Core registered in at 0.4%. The Union’s Construction Output came in at -3.8% topping the expectations of -15.6% in July.
EURGBP Technical Analysis After the BOE Decision
EURGBP reversed early loses and trades now 0.37% higher at 0.9143 reversing three days of correction from the five-month highs at 0.9219 as the correction from two-month highs continues for the second day. The technical picture remains bullish despite the correction as the pair stays above the 0.9030 mark.
Now resistance stands at 0.9153 today’s top. More sellers would emerge at 0.9210 the high from yesterday’s trading session. The recent top from September 11 at 0.9294 is the next supply zone.
On the contrary, support for EURGBP is at 0.9083 the daily low. The critical support is the 50-day moving average at 0.9038. A break below would open the way the 100-day moving average at 0.8988.
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EURGBP Daily Chart
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