GBP Advances As BoE Ready To Do More
Fiona Cincotta March 26, 2020 2:21 PM
The BoE highlighted the uniqueness of the economic outlook, unlike any crisis that the central bank has had to navigate through before. The BoE predicts a sharp hit to global GDP through the first half of the year. Unemployment is expected to rise rapidly. However, the BoE still considers this to be a temporary hit, particularly if business failures and job loses can be avoided.
Meanwhile the ECB has loosened the self-imposed limits, giving itself an unprecedented level of flexibility it its plan to buy €750 billion in additional bonds to limit the impact of the financial fallout from coronavirus. Almost all of the constraints from previous asset purchases have been removed or loosened significantly. This move validates the ECB’s pledge to backstop the markets amid no limit to its commitment to the euro.
These moves from the BoE and the ECB come after the Fed pledged unlimited bond buying if necessary.
EUR/GBP levels to watch
EUR/GBP is trading 0.3% lower at 0.9121, below its 50, 100 and 200 sma on the 1 hour chart, a bearish chart.
Immediate support can be seen at 0.9120 (today’s low) prior to 0.9055 (yesterday’s low) and 0.8995 (low 20th March)
Resistance is seen at 0.9237 (today’s high) prior to 0.9250 (yesterday’s high)
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