EUR/GBP turns positive as GBP sell-off gathers pace

EUR/GBP turned positive to clock a session high of 0.7984 as Cable sell-off gathered pace on talks of rise in BOE rate hike bets.

Gains capped by risk-on in equities

Cable is now testing bids around 1.42 levels as markets now see a 33% probability of BOE reducing rates in H1 2016 as opposed to 10% probability seen in February. BOE rate decision is due tomorrow and markets are positioning for a possible dovish talk ahead of June referendum.

However, gains are hard to come since EUR/USD is feeling the heat of a sharp rally in the European stocks. Consequently, the pair is now trading marginally higher around 0.7978 levels.

EUR/GBP Technical Levels

The immediate hurdle is noted at 0.80, above which the cross could target 0.8028 (previous day’s high). A violation there would expose 0.81 handle. On the other hand, a break below 0.7961 (previous day’s low) could see the pair test support at 0.7946 (Mar 24 high) and 0.79 handle.