EUR/GBP breaks above 0.8600 for the first time since early July

• The euro is among the best performers on Tuesday on ECB rate hike expectations.
• The pound is under pressure amid risk aversion.
• EUR/GBP gains more than 170 pips in the last three sessions.

The EUR/GBP accelerated the move higher and jumped to 0.8601, reaching the highest level since July 6. While the euro is among the best performers, the pound is under pressure amid risk aversion.

range is over

EUR/GBP’s rally began on Friday, following comments from European Central Bank officials suggesting a 75 basis point rate hike at the next meeting. On Tuesday, Governing Council members Muller and Knott discussed the possibility of a significant hike, further boosting the euro.

The pound is under pressure across the board. Cable hit a new two-year low. Concerns about the UK’s economic outlook are growing as energy costs soar. The drop in Wall Street prices is also weighing on the pound. The Dow Jones falls 0.80% and the Nasdaq 1.17%.

Since last Friday, the cross has risen 175 pips. On Monday it broke the 0.8500 resistance zone and the upper limit of a consolidation range. It is now holding above 0.8540 and testing levels above the critical 0.8600 level. The next resistance is located at 0.8640.

Technical levels