EUR/GBP challenges 2016 highs above 0.8800

The now softer tone in the Sterling is allowing EUR/GBP to return to the upper bound of the recent range beyond the 0.8800 limestone.

EUR/GBP appears constructive above 0.8650

The European cross is extending its September/October rally further north of the 0.8800 handle today bolstered by another wave of selling pressure hitting the British pound.

In the meantime, the current bullish tone in the cross remains underpinned by the 4-month support line - currently around the mid-0.8600s - while there seems to be no relevant hurdles until highs above 0.900 the figure seen in May/July 2011.

Increasing fears over Brexit have been weighting on GBP as of late, adding to the already weak scenario of a potential looser monetary policy by the Bank of England in the next months.

EUR/GBP key levels

The cross is now up 0.42% at 0.8830 and a breakout of 0.8843 (2016 high Oct.5) would open the door to 0.8942 (high Oct.25 2010) and finally 0.9084 (high Jul.1 2011). On the downside, the next support aligns at 0.8649 (4-month support line) ahead of 0.8555 (low Sep.23) and finally 0.8542 (55-day sma).