EUR/GBP challenging tops near 0.8750

The now softer tone around the British Pound is encouraging EUR/GBP to move higher and test the area of recent highs in the mi-0.8700s.

EUR/GBP focus on PMI

The recent recovery of the single currency helped the European cross to advance for the third session in a row and challenge at the same time the area of 2-month tops around 0.8750.

EUR/GBP is posting its sixth consecutive week with gains so far, gaining more than four big-figures, or more than 5%, since YTD lows in the 0.8310 area seen in mid-April.

The cross stays underpinned by positive chatter around the ECB and the likeliness of a shift to a more aggressive tone in the next months, speculative positioning and a moderate recovery in the euro region, all favouring EUR. On the GBP-side, jitters regarding the upcoming elections have been weighing on sentiment as of late, relegating somewhat the positive fundamentals.

Later in the session, May’s final manufacturing PMI prints are due in Euroland and the UK.

EUR/GBP key levels

The cross is now up 0.23% at 0.8745 with the next up barrier at 0.8679 (high May 23) seconded by 0.8738 (high Mar 29) and finally 0.8788 (high Mar.14). On the other hand, a breach of 0.8703 (low May 31) would expose 0.8653 (low May 30) and then 0.8600 (200-day sma).