EUR/GBP breaks critical level and heads higher towards 0.8700

• Pound weakens further after UK data.
• The euro and Swiss franc rallied against the dollar on Tuesday.
• EUR/GBP could have the highest daily close in a year.

EUR/GBP returned above 0.8600 and jumped to the 0.8650 area where it is trading at levels last seen in September 2021. A confirmation of these prices would leave the crossing enabled for more increases.

After the ECB comes the BoE

The pound started to weaken on Tuesday after UK jobs data for April showed an unexpected rise in the jobless rate. This occurs in the run-up to knowing on Thursday the decision of the Bank of England (BoE). A rise of 25 basis points is expected, although high inflation leaves the stakes open to a stronger move. This collides with the current moment of the economy, with downward growth estimates and fears of a recession.

In the Eurozone it was known that the ZEW index of economic sentiment in Germany remained at -34.3 in June.

Beyond 0.8600

for months EUR/GBP cannot firmly break above 0.8600 and in turn, when he managed to do so, he collided with 0.8650. The cross is retesting that level and if confirmed would be poised for a bullish extension, towards 0.8700 initially.

Should it be rejected again, ie a return below 0.8600, then the EUR/GBP could return to the previous range between 0.8490 and 0.8600, which contained the cross from mid-May until recently. It remains to be seen if the break is confirmed.

Technical levels