EUR/GBP breaks above 0.8600 and jumps to highest in two months near 0.8650

• Pound under pressure amid fuel supply crisis in the UK.
• EUR/GBP about to test the 200-day SMA for the first time since January.

The EUR/GBP jumped from one-week lows under 0.820, breaking above 0.8600. The euro soared to 0.8640, reaching the highest level since July 21. The cross remains near the highs, with a solid bullish momentum on the back of a weaker pound across the board.

The crisis in the supply chain in the United Kingdom is affecting the near-term economic outlook and weighs on the currency. Economists warn the crisis could impact on critical sectors, like what is happening with fuel, and probably push inflation higher and weigh on consumer confidence.

The pound is the worst performer among G10 currencies. The GBP/USD pair is falling more than 150 pips as it trades at 1.3525, the lowest level since January while EUR/GBP is having the biggest daily gain in months.

EUR/GBP holding firm above 0.8600

The cross approached the 200-day moving average that stands at 0.8650. A daily close around the current level should support more gains in the short term. The next level to watch stands at 0.8665/70, the June high.

A decline back under 0.8600 would alleviate the bullish pressure and should suggest the continuation of the range between 0.8600 and 0.8500.

Technical levels