EUR/GBP jumps to a fresh multi-week high around 0.8435 after ECB

• EUR/GBP attracted some buying on the dips on Thursday and turned positive for the fourth day in a row.
• A more aggressive policy decision from the ECB lifted the shared currency and continued to support the move.
• The worsening situation in Ukraine acts as a headwind for the euro and limits gains for the cross.

The crossing EUR/GBP caught some bids after the European Central Bank (ECB) announced its policy decision and soared to a fresh multi-week high around 0.8435 in the last hour.

The cross attracted some buying on dips near the 0.8375 region on Thursday and moved into positive territory over the four successive sessions in reaction to a more hawkish ECB. As expected, the Governing Council decided to leave official interest rates unchanged at the end of the March meeting. That said, the central bank said it will conclude net purchases under the PPP program in the third quarter and raised bets on a 25bp rate hike in October. This, in turn, was seen as a key factor behind the shared currency’s relative outperformance against its British counterpart.

With the latest move higher, the EUR/GBP cross has risen around 225 pips from 0.8200, or the lowest level since 2016, and looks poised to extend the week-long uptrend. Acceptance above the 0.8400 round level validates the positive outlook, although concerns about the fallout from the worsening situation in Ukraine warrant some caution for aggressive bullish traders. In the latest development, negotiations between the Russian foreign minister and his Ukrainian counterpart broke down without any notable progress. This could act as an obstacle for the shared currency.

Technical levels