EUR/GBP touched lows of 0.8138, the weakest level since January 2013, and was last trading at 0.8140, 0.18% lower for the day.The pair was likely to find support at 0.8085 and resistance at 0.8173, the session high.The drop in the euro came after media reports that Germany’s central bank is open to more stimulus measures from the ECB.The Wall Street Journal reported the Bundesbank would back monetary easing measures if they were needed to keep persistently low levels of inflation from becoming entrenched in the euro zone.The ECB warned last week that it is “comfortable” with acting at its next meeting in June after it has a chance to review the latest economic projections.The single currency also came under pressure after data showed that German economic sentiment fell to a 16-month low in May.
GBP/USD hit 1.6826, the lowest since May 2 and was last down 0.15% to 1.6842.Cable was likely to find support at 1.6805 and resistance at 1.6937, Friday’s high.Sterling’s losses were held in check amid expectations that the BoE would upgrade its forecast for growth when it presents its quarterly inflation report on Wednesday.The latest U.K. jobs report, also due for release on Wednesday, is expected to show a another decline in the unemployment rate to a more than five year low of 6.8% in the three months to March, while wage growth is expected to rise again.A strong reading would reinforce expectations that the BoE will raise interest rates ahead of other central banks and send the pound rising towards recent almost five year peaks against the dollar.
1. Buy GBP/USD Above 1.6905- TG: 1.6925/ 1.6955 SL 1.6875
2. Sell GBP/USD Below 1.6860- TG: 1.6840/ 1.6810 SL 1.6890