FxWirePro: EUR/GBP consolidates previous session's slump, outlook bearish

EUR/GBP chart - Trading View 

EUR/GBP was trading largely muted at 0.8745 at around 07:40 GMT, after closing 0.82% lower in the previous session.

The pair dived to lowest level since May 2020 after a less dovish than expected BoE monetary policy decision buoyed the British pound.

The Bank of England as widely expected left interest rates unchanged at 0.1% and the bank’s Asset Purchase Facility at £895Bn in a unanimous vote.

The bank reiterated that it will not tighten monetary policy until it is “achieving the 2% inflation target sustainability” and added that they will not be ready to implement NIRP for at least another six months.

Traders largely ignore a downbeat construction PMI data and hawkish vibes from the BoE on NIRP, QE and more optimistic forecasts for UK economy lifted GBP.

EUR/GBP tested 61.8% Fib retracement at 0.8743 and is on track to close the week below 200W MA which will add to the bearish bias.

Next support for the pair on the downside lies at 0.8670 (Apr 30th low). Further weakness will see dip till 76.8% Fib at 0.8559.