EUR/GBP – Key support holding

A bullish signal?

With both the ECB and BoE meetings now behind us, how do we assess the impact on the currencies and what it means going forward?

Interestingly, there were no major surprises on either side. The BoE moved slightly earlier while the ECB tweaked its asset purchases, with the result being that the PEPP comes to an end in March while the support it provided is only slowly phased out over an additional six months.

In terms of the technicals, there may also be some interesting takeaways. The spike lower yesterday saw the pair run into support around the 61.8 fib (4-hour chart) before quickly recovering to sit back above the 50 fib and 200/233-period SMA band.

This had been key support prior to the meetings and remains so now. If 0.85 holds, it could potentially be a very bullish signal going into the new year. Another failure and the long-term downtrend may continue.

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