EUR/GBP clinches 0.8800 and beyond on steady BoE

• The cross moves higher and tests 2-day peaks above 0.8800.
• The BoE left its monetary policy unchanged today.
• PM Theresa May will meet with EU officials with focus on backstop.

The negative mood around the British Pound is now lifting EUR/GBP to fresh 2-day highs in levels beyond 0.8800 the figure.

EUR/GBP up move bolstered by GBP-selling

A wave of extra selling orders pushed the Sterling lower vs. its rival currencies in the wake of the BoE meeting, motivating the European cross to reclaim the 0.8800 milestone and above.

In line with market expectations, the Bank of England left the refi rate and the Asset Purchase Facility intact at 0.75% and £435 billion, respectively, with the MPC voting unanimously to maintain the monetary status quo.

GBP is also deriving downside pressure after the central bank revised lower its forecasts for GDP growth this year (1.2% from 1.7%) and 2020 (1.5% from 1.7%) backed on the impact on the domestic economy of increased Brexit uncertainty and the global slowdown.

The BoE also sees the tightening cycle running at a gradual and limited pace as long as economy matches expectations. 

EUR/GBP key levels

The cross is now up 0.14% at 0.8795 and a surpass of 0.8821 (high Feb.7) would aim for 0.8861 (200-day SMA) and finally 0.8893 (55-day SMA). On the flip side, immediate contention emerges at 0.8746 (10-day SMA) seconded by 0.8655 (monthly low Nov.13 2018) and then 0.8617 (2019 low Jan.25).