EUR/GBP jumps to 7-month highs beyond 0.9200

• EUR/GBP moves higher and surpass the 0.9200 mark.
• Increasing selling pressure in the pound helps the upside.
• Focus stays on the BoE and the probability of extra easing.

The downside pressure around the quid is motivating EUR/GBP to trespass the 0.9200 mark and advance to fresh 7-month highs.

EUR/GBP stronger on GBP-selling

EUR/GBP is prolonging the March rally on Wednesday, advancing for the eighth session in a row and breaking above the key barrier at 0.92 the figure to record new highs in levels last traded in August 2019.

The unremitting selling bias surrounding the quid has been behind the sharp rally in the European cross in the last couple of weeks. Indeed, the sterling is on the defensive on the back of rising speculations that the BoE could announce further easing of its monetary conditions in order to fight the impact of the COVID-19 on the UK economy.

In the calendar, final CPI figures in the euro area matched the preliminary readings, showing consumer prices rising 0.4% inter-month and 1.2% from February 2019.

What to look for around GBP

The British Pound remains entrenched well into the negative territory so far this week, shedding extra ground and falling to levels last seen in times of the Plaza Accord in 1985 vs. the greenback and to multi-month lows vs. the euro. Prospects of further easing by the “Old Lady” in combination with USD-strength are heavily weighing on the sterling and keep the bearish outlook unaltered for the time being. In addition, GBP is expected to remain under the microscope in light of the upcoming EU-UK trade negotiations to kick in later this year.

EUR/GBP key levels

The cross is up 0.98% at 0.9210 and faces the next hurdle at 0.9271 (2020 high Mar.18) seconded by 0.9324 (2019 high Aug.12) and then 0.9306 (2017 high Aug.29). On the downside, a drop below 0.9099 (78.6% Fibo of the August-December drop) would expose 0.9019 (monthly high Oct.10 2019) and finally 0.88745 (200-day SMA).