EUR/GBP retreats from 3-week highs

EUR/GBP  is falling on Tuesday, ahead of Thursday’s decision of the Bank of England. The pair rose during the three previous days and earlier today it peaked at 0.8492, the highest level since July 12.

From the highs the euro retreated sharply amid a rally of GBP/USD and after the beginning of the US session it bottomed at 0.8419. It was trading slightly above the lows, down 40 pips for the day.

Levels to watch

It is being the best day for the pound against the euro since July 20. So far the area around 0.8420, where the 20-day moving average currently stands capped the decline. A consolidation below could weaken further the euro; the next support might lie at 0.8400/05 (July 1 high) and then 0.8350 (July 26 & 27 low). To the upside, resistance now might be seen at 0.8450 (July 28 high), 0.8477 (July 29 high) and 0.8492 (daily high).