Forex: EUR/GBP reaches 0.8450 after European Commission report

FXstreet.com (Barcelona) - Following the publication of UK Markit Services PMI, the EUR/GBP eased from 0.8445 highs down to 0.8430, but the cross returned to its upside momentum ahead of the European Commission growth forecasts in the EU, reaching as high as 0.8450.

The report suggests -0.4% and -0.1% of annual GDP change in the euro area and EU, respectively, but 2014 would allow growth by 1.2% and 1.4%, respectively. Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro said: "In view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis in Europe. The EU’s policy mix is focused on sustainable growth and job creation. Fiscal consolidation is continuing, but its pace is slowing down. In parallel, structural reforms must be intensified to unlock growth in Europe."

“The currency pair will remain immediately offered while trading below the late April high at 0.8497”, wrote Commerzbank analyst Karen Jones, adding that the EUR/GBP is moving towards 0.8394, a fall through which will have the 2012-13 support line at 0.8296.