The liquidation of EUR/GBP positions continues this morning despite the high odds of the BOE taking further action to slash interest rates when they meet tomorrow Expectations are all over the low with some seeing the Old Lady cutting to the chase to try and get ahead of a disinflation tsunami turning into a deflationary flood. The safe play is to expect at least a 50 bp cut to 1.5% in the base rate.
Model funds have joined the EUR/GBP selling, helping send the pair to fresh session lows 0.9016. 0.8990 is Fibo support, the 38.2% retracement of the October/December range of 0.7680 to 0.9803.
