EUR/GBP corrects lower after 200-pip rally

EUR/GBP  is about to end the day lower amid a weak euro after the decision of the European Central Bank to leave rates unchanged. The pair failed to hold to gains and fell toward 0.7700.

EUR/GBP capped by the 20-DMA

Earlier today the pair rose to 0.7775, reaching the strongest level in two weeks. Then it stabilized and weakened under 0.7750. It dropped further after Mario Draghi’s press conference and bottomed during the American session at 0.7719, level still located more then 50 pois above Wednesday’s lows.

The euro yesterday rose for the third day in a row. The rally from 0.7570 found resistance at the 10-day moving average that stands around 0.7750/55. Price moved modestly away from that level. If ti rises back above the euro could regain strength and climb further. The next resistance might be seen at 0.7800 (psychological) and 0.7840 (Apr 29 high / May 19 low).

The intraday tone continues to favor the pound. Below daily lows, support could be seen at 0.7695/0.7700 (May 31 high / psychological) and 0.7670 (Jun 1 low).