EUR/GBP plunges below mid-0.8700s post-BOE

The EUR/GBP cross extended its retracement slide from near four-week tops, levels beyond the 0.8900 handle, and tumbled to a one-week low post-BOE announcement.

The British Pound surged across the board after minutes from the BOE monetary policy meeting indicated that interest rates hikes could be somewhat earlier and faster than anticipated in the November report. 

The cross came under some intense selling pressure, taking along some trading stops placed at the 0.8800 handle, and tumbled to an intraday low level of 0.8739. 

The selling pressure seems to have abated a bit, at least for the time being as investors now look forward o Governor Mark Carney's comments on the central bank's latest quarterly inflation report (QIR). 

Technical levels to watch

A follow-through selling pressure has the potential to drag the cross towards the 0.8700 handle en-route 0.8660-55 support area. On the upside, the 0.8800 handle now becomes an immediate hurdle, which if cleared could lift the cross back towards 0.8870 supply zone ahead of the 0.8900 handle.