EUR/GBP tumbles near 0.8430 on Draghi

EUR/GBP has picked up extra downside pressure today following Draghi’s press conference, testing fresh lows in the 0.8440/30 band.

EUR/GBP weaker on EUR-weaknes

The European cross met a wave of selling pressure after ECB’s President M.Draghi stressed that ‘tapering’ its current QE programme has not been discussed at today’s meeting.

EUR quickly faded the initial optimism sparked after the ECB said it will reduce its monthly purchases of bonds from April 2017 to December 2017, boosting the cross to highs near 0.8570.

However, as the statement went under way, the buying pressure rapidly fizzled out, triggering a wave of selling interest.

The ECB said that the QE programme can be modified in size and extension if necessary, while the bank will now buy assets below the deposit rate.

He also reiterated the need for urgent structural reforms in the region, and he said that the euro area has been growing at a moderate pace. The Governing Council now sees the economy expanding at 1.7% in 2016 and 2017 and 1.6% in 2018. In addition, the bank now expects inflation measured by the broader HICP rising 0.2% this year, 1.3% in 2017 and 1.5% in 2018.

EUR/GBP key levels

The cross is now retreating 0.79% at 0.8451 facing the next support at 0.8298 (low Dec.5) followed by 0.8295 (200-day sma) and then 0.8248 (low Jul.14). On the other side, a surpass of 0.8553 (high Dec.7) followed by 0.8582 (high Nov.30) and finally 0.8637 (100-day sma).