EUR/GBP rises to its highest level since December, approaches 0.8600

• The pound remains under pressure, still hit by the BoE meeting.
• The euro among the best on Friday.
• EUR/GBP posting a weekly gain of almost 200 pips, the best in months.

The EUR/GBP rose further on Friday and rose to 0.8590, reaching the highest intraday level since December. It then fell back to 0.8565. In the last two days, she earned more than 150 pips

The cross is about to post the highest weekly close since October, the biggest gain in months. The technical outlook has improved dramatically for the Euro, which is facing 0.8600 as the next critical resistance. The 20-week moving average at 0.8375 is now critical support. The line is flattening out and could turn positive for the first time since 2020.

A tough week for the GBP

The pound is poised to end the week with weakened losses across the board, particularly after the Bank of England meeting. The central bank announced a rate hike on Thursday from 0.75% to 1.00% as expected. Market participants turned their attention to the future direction and it was not clear. Three members calling for a 50 basis point rate hike were countered by two members who argued that it would be appropriate to remove the forward guidance on future hikes.

While the pound remains under pressure, the euro received support from the European Central Bank talks with more board members talking about rate hikes and even a positive rate by the end of the year. Those comments helped the euro on Friday.

Analysts at Danske Bank expect EUR/GBP to remain range bound around 0.84. “On the one hand, a revaluation from the Bank of England (and perhaps a more aggressive ECB) is likely to weigh on the GBP, but on the other hand, the GBP tends to appreciate against the EUR in an environment where the USD works” .

Technical levels