ECB chief Mario Draghi surprised the markets as indicated by the reaction of all the euro currency pairs. The ECB will block all EUR appreciation approaches and is very determined to cause inflation. Yesterday EURGBP lost 150 pips. Today for short term, price break below the support at level 0.7200, but the price quickly returned to this level. If indicated support has been permanently broken the goal of falls will be the level of 0.6940. Along the way supply will have to deal with supports: 0.7165, 0.7090, 0.7035.
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Wider view, time-frame W1
Since 2008 EURGBP moves in a downtrend. Price formed a large size downward channel which upper limit has not been tested for over 2 years. The downward trend is so strong that rebound after falls was shallow and abolished only the lowest fibo level (23.6%) and failed to reach 38.2%. At the moment, after a strong fall, rebound may appear – but in the longer term, a new low will be a main target.
