The sterling whipsawed after BOE officials’ comment about a “modest” rate hike over the coming months. The euro saw strong bids at the base of the February breakout rally (0.8310).
A break above 0.8370 wiped out some selling interest, a prerequisite for a meaningful recovery. 0.8400 is the next resistance and its breach would further boost buyers’ confidence and propel the single currency to the recent high at 0.8475.
On the downside, a bearish breakout would invalidate the rebound pattern and cause a sell-off below 0.8280.
