Forex: EUR/GBP plunges after BoE's King

FXstreet.com (Barcelona) - Right after the release of the Quarterly Inflation Report, as BoE's King showed confidence in the "Funding for Lending Scheme" (FLS) ability to lower funding costs and that spending cuts have been faster than planned, the British Pound went for a rally, while the Euro weakens after the German bund auction (yields at 1.42%) and contracting industrial production in Germany. Monthly data dropped by -0.9% in June and the annualized figure is unchanged at -0.3% (May's number revised from 0.0% to -0.3%).

A stronger GDP and a weaker EUR provided room for a EURGBP plunge since 09:00 GMT from 0.7948 high to 0.7891 low. The cross is trying to find support at 0.7900 sentiment line.

"We have a near term uptrend at 0.7838 and will assume a break below here is needed to confirm the end of the upside corrective phase and signal a slide back to the 0.7757 July low", wrote Commerzbank analyst Karen Jones.