EUR/GBP drops to 1-week lows

EUR/GBP dropped further during the American session and bottomed at 0.7845, the lowest level since May 3. The pound is among the top performers, lead by GBP/USD that hit fresh highs above 1.4500.

The pair broke below the lows that it reached after events from the Bank of England, that included the decision, minutes and the Quarterly Inflation Report. Below 0.7860 it accelerated the downside. So far the area around 0.7850 capped the decline and currently it trades at 0.7860/65, down 40 pips from yesterday’s closing price.

EUR/GBP testing important support

So far the pair has been unable to consolidate below 0.7860/65, that has become an important short-term support (May 5 & 11 lows); if it holds below the next support to consider could be seen around 0.7800 - 0.7810.

To the upside, the level to watch is the 0.7915/20 zone, a significant close above could give further momentum to the euro, for a rally toward 0.8000.