EUR/GBP: BoE and ECB in focus, bears in control, eyes on 0.8620

• EUR/GBP: remains pressured and eyes 0.8620 on the way below 0.87 handle.
• EUR/GBP: will ECB crunch time come in June or July?

EUR/GBP remains pressured below the descending 10-D SMA after a sell-off in the euro related to the ECB meeting's outcome in markets today. Currently, EUR/GBP is trading at 0.8698, down -0.36% on the day, having posted a daily high at 0.8753 and low at 0.8680.

As widely expected, the ECB left policy on hold while coming across somewhat more cautious. The Central Bank has been perceived to be playing things safe after a disappointing turn out in the economy in Q1.The previous March meeting had surprised markets when Draghi was signalling it’s on track to end its stimulus program before the end of 2018. Crunch time looks to be June or July instead. For the BoE, it is now a coin toss as to whether they will hike rates at the 10th May meeting, but the divergence still weighs in favour of the bears, for now. 

Draghi speech indicates that recent slowdown matters much and APP end will be moved to 2019

EUR/GBP was initially bid to the 100-hr SMA at 0.8746 but suffered a blow through the lower end of the same handle to suffer a knock below to 0.8680 before a recovery back to current spot back around 0.8700.

EUR/GBP levels

Eyes now turn to the April low at 0.8620. "While capped here we will continue to target 0.8526, the 78.6% retracement of the move from 2017. En route is a support line at 0.8582," analysts at Commerzbank argued, adding, "Rallies will find initial resistance at the late March and current April highs as well as the 55 day moving average at 0.8794/.8801, key resistance is the 200 day ma at 0.8882. "