FxWirePro: EUR/GBP plunges to 8-week lows (0.8866) after pound spikes on hawkish BoE, finds strong support at W 20-SMA

• EUR/GBP plunged to 8-week lows at 0.8866 as pound rallied across the board overnight post BoE.
   
• The pair is now consolidating previous session's massive slump, bias still lower.
   
• BoE left policy unchanged with a vote 7-2 to keep interest rates at record low level of 0.25%, as widely expected.
   
• The statement and the minutes were perceived as hawkish and comments from Governor Mark Carney that followed boosted the pound further.
   
• Carney reaffirmed what the BoE said in the statement and added that the possibility of a rate hike has risen.
   
• The major is currently holding strong support at 1W 20-SMA at 0.8865, we see weakness on break below.
   
• Technical studies are bearish and support further downside in the pair. Scope for test of 61.8% Fib at 0.8735.
   
• Bearish invalidation only on break above 50-DMA at 0.9037. 

Support levels - 0.8865 (converged 1W 20-SMA and daily cloud), 0.8855 (100-DMA), 0.8735 (61.8% Fib retrace of 0.83822 to 0.93064 rally)

Resistance levels - 0.89, 0.8974 (5-DMA), 0.9037 (50-DMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-Pound-upside-picks-up-pace-after-upbeat-UK-inflation-data-EUR-GBP-breaks-50-DMA-at-09030-to-hit-6-week-lows-at-09003-894167) has hit all targets.

Recommendation: Watch out for break below W 20-SMA to go short, SL: 0.89, TP: 0.88/ 0.8735.

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