The Euro was seen trading lower earlier during the Asian session against the British pound, as the Bank of England Governor’s speech ignited an up-move in the British pound. Mark Carney mentioned that there is a possibility of a rate hike ahead of the plan. This was seen as a buying opportunity by the British pound buyers. The EURGBP pair fell more 50 pips and traded below the all-important 0.8000 level.
The EURGBP pair fell sharply to trade around the 0.80 level, as the market sentiment tilted in favour of the British pound. The pair has breached a trend line which was holding the downside in the pair. This break can be seen as critical, as it might open the doors for further losses in the short term. The pair might even fall towards the 0.7900 level if the losses continue. The pair is trading below 100 and 200 weekly simple moving averages, which is another negative sign.
The only positive sign as of now is that the RSI is flirting around the extreme level on the weekly timeframe. This could result in a short-term pullback in the pair. There are several support levels on the way down for the pair, and it would be interesting to see where buyers emerge to take the pair higher again.
German Consumer Price Index Data
The German Consumer Price Index data was published during the London session by the Federal Statistical Office Germany. The Forecast was slated for a 0.9% rise in May 2014. The outcome was in line with the expectations, as the Consumer prices in Germany rose by 0.9% in May 2014 compared with May 2013. Moreover, the month-over-month reading registered a 0.3% decline. The EURGBP pair was unchanged after the release.
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Guest post by Simon Ji of IKOFX
