EUR/USD slid 0.18% to 1.3887, after rising as high as 1.3994 earlier, the strongest level since October 2009.The pair was likely to find support at 1.3870 and resistance at 1.3875.The euro gave up gains after Draghi said the ECB governing council is comfortable with acting at its next meeting to stop euro area inflation from falling too low, but it wants to review new staff economic projections first.Draghi said that recent weakness in inflation has been due to food and energy prices, but the strong euro and weak domestic demand are also pushing down inflation. He reiterated that the ECB does not have a target for the euro exchange rate, but said that the bank would closely monitor exchange rate developments.
GBP/USD was trading at 1.6965, not far from the peaks of 1.6993 reached on Tuesday, the strongest level since August 2009.Cable was likely to find support at 1.6925 and resistance at 1.7000.The BoE’s Monetary Policy Committee voted to keep interest rates on hold at their current record low of 0.5%. The bank also made no change in its quantitative easing program, which remains at £375 billion.The BoE will publish the minutes of this month’s meeting on Wednesday, May 21.Expectations for a U.K. rate hike in the early part of next year have propelled sterling to multi-year highs against the dollar, after a recent string of strong economic reports indicated that the recovery is deepening..
Early last week BoE Governor Mark Carney said the U.K. recovery is starting to broaden, but added that the bank still sees plenty of slack in the labor market.
1. Buy GBP/USD Above 1.7005- TG: 1.7025/ 1.7055 SL 1.6975
2. Sell GBP/USD Below 1.6950- TG: 1.6930/ 1.6900 SL 1.6980