EUR/GBP jumps to fresh weekly tops, around 0.8700 mark on Lagarde’s comments

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  • EUR/GBP gained strong positive traction for the third consecutive session on Thursday.
  • The momentum got an additional lift in reaction to the ECB President Lagarde’s comments.
  • Lagarde said that the reduction of PEPP purchases was not discussed at Thursday’s meeting.

The EUR/GBP cross jumped to fresh weekly tops during the mid-European session, with bulls now looking to build on the momentum beyond the 0.8700 round-figure mark.

The cross built on this week’s goodish rebound from sub-0.8600 levels and gained (strong) traction for the third consecutive session on Thursday. The intraday buying around the shared currency picked up pace after the ECB President Christine Lagarde said that the reduction of PEPP purchases was not discussed.

This seemed to have disappointed some investors anticipating a debate over the future of the PEPP and prompted some short-covering around the common currency. This, along with the emergence of some selling around the British pound, provided an additional boost to the EUR/GBP cross and remained supportive.

Apart from this, the latest leg of a sudden spike could further be attributed to some technical buying above the 0.8650-60 region. From current levels, any subsequent move up is likely to confront some resistance near monthly swing highs, around the 0.8715-20 region, which if cleared should pave the way for additional gains.

Technical levels to watch

 

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