EUR/GBP takes support of 5-DMA ahead of the BOE event

EUR/GBP wobbled in Asia, but was supported by the 5-DMA level of 0.8954 ahead of the Bank of England [BoE] rate decision, quarterly inflation report release and Carney’s press conference. 

BOE to keep rates unchanged

Economists expect the central bank to hold rates unchanged, but keep the rate hike talk alive and thus avoid further rise in the imported inflation. GBP pairs will take cues from the vote count. 5-3 vote split will be a hawkish surprise and yield a sell-off in the EUR/GBP pair. 

EUR/GBP could spike if the BOE votes 6-2 and Carney talks down the urge to unwind the post Brexit referendum stimulus. 

EUR/GBP Technical Levels

The cross currently trades around 0.8960 levels. A break above 0.90 [psychological levels] would open up upside towards 0.9060 [expanding channel hurdle] and 0.91 [zero levels]. On the other hand, a breakdown of support at 0.8922 [Aug 1 low] could yield a sell-off to 0.8891 [July 27 low] and 0.8860 [June 9 high].