After ECB’s rate decision to keep the rates unchanged, EURGBP dropped and broke the midterm support at 0.87250.
EURO has some bearish themes:
Some EU members, with the support of President of the European Council, Donald Tusk, intend to block Britain from euro clearing.
Growth has converged, but monetary policy has not. Experts argue peak divergence – on the respective balance sheets – is still ahead.
Germany continues to grapple with its political troubles and the possibility of facing new elections in 2018.
The Euro’s appreciation is likely to spur the ECB’s policy response, most likely verbal intervention on the euro being too strong.
The credibility of the ECB could be affected if the environment changes forcing the central bank to renege on its earlier guidance. Rates may not rise until well after the end of asset purchases, which would push the first rate hike out to 2019.
On the H4 Chart, the price is below EMA 50,100 and 200.
0.86670 and 0.86370 are the first targets of the pair.
0.86370 is one of the important supports. 0.85500 will be the first target of the pair, as soon as it breaks below 0.86370.