EUR/GBP spikes to 0.8630, strongest since Aug 2013

The EUR/GBP cross extends its winning streak into a fourth day today, and runs through fresh bids post-China open, mainly in response to heavy selling seen in GBP/USD post-BOE Carney’s comments delivered yesterday.

EUR/GBP jumps above 0.86 handle  

Currently, the EUR/GBP pair rallies +1.20% to 0.8608, quickly fading a spike to fresh 35-month highs posted at 0.8628 some minutes ago. The EUR/GBP cross remains heavily bid and extended the upside on the back of aggressive GBP selling across the board as markets continue to price-in a BOE rate cut following BOE Governor Carney’s comments, citing central bank’s readiness to ease further in a bid to combat Brexit-led economic fallout.

Looking ahead, the Brexit-related news flow will continue to drive the EUR/GBP cross, while ECB Draghi’s speech will be also closely heard for fresh impetus on the cross. Besides, the FOMC minutes will also provide fresh insights on the Fed’s interest rates outlook in the wake of Brexit.

EUR/GBP Technical Levels   

To the upside, the next resistance is located at 0.8628 (Daily & multi-year high) above which it could extend gains to 0.8650 (psychological levels). To the downside immediate support might be located at 0.8490 (Daily pivot) below that at 0.8461 (5-DMA).