- The pound is under pressure amid the UK fuel supply crisis.
- EUR / GBP is about to test the 200-day SMA for the first time since January.
The EUR/GBP it jumped from week-long lows below 0.820, breaking above 0.8600. The euro soared to 0.8640, reaching the highest level since July 21. The cross remains near the highs, with solid bullish momentum on the back of a weaker pound across the board.
The crisis in the supply chain in the UK is affecting the short-term economic outlook and is weighing on the currency. Economists warn that the crisis could impact critical sectors, such as what is happening with fuels, and likely push inflation higher and affect consumer confidence.
The pound is the worst performer among the G10 currencies. GBP / USD is dropping more than 150 pips while trading at 1.3525, the lowest level since January, while EUR / GBP is making the biggest daily gain in months.
EUR / GBP holds firm above 0.8600
The cross approached the 200-day moving average which stands at 0.8650. A daily close around the current level should support more short-term gains. The next level to watch is at 0.8665 / 70, the June high.
A drop below 0.8600 would ease the bullish pressure and should suggest a continuation of the range between 0.8600 and 0.8500.