EUR/GBP gains more than 170 pips during the last three trading days.
The EUR/GBP accelerated the move to the upside and jumped to 0.8601, reaching the highest level since July 6. While the euro is among the best performers, the pound is under pressure amid risk aversion.
No more range
The rally in EUR/GBP started on Friday, on the back of comments from European Central Bank officials suggesting a 75 basis points rate hike at the next meeting. On Tuesday, Governing Council members Muller and Knott spoke about the possibility of a significant hike, boosting the euro further.
The pound is under pressure across the board. Cable hit a new two-year low. Concerns about UK’s economic outlook are growing as energy costs soar. Also the decline in equity prices in Wall Street weighs on GBP. The Dow Jones is falling by 0.80% and the Nasdaq by 1.17%.
Since last Friday, the cross has risen 175 pips. On Monday it broke the 0.8500 resistance area and the upper limit of a consolidation range. Now it is holding above 0.8540 and testing levels above the critical 0.8600 mark. The next resistance stands at 0.8640.
EUR/USD holds above parity as dollar rally loses steam
EUR/USD has managed to recover above parity after having dropped below that level on upbeat macroeconomic data releases from the US. With the US Dollar Index struggling to gather bullish momentum, however, the pair stays in positive territory during the American session.
GBP/USD struggles to rebound, trades near mid-1.1600s
GBP/USD continues to trade deep in negative territory near 1.1660 despite having erased a small portion of its daily losses. The risk-averse market environment and the better-than-expected data from the US allow the greenback to preserve its strength on Tuesday.
Gold: Poised to break the monthly low
Spot gold is under pressure and nearing the August low set this week at $1,720.28 a troy ounce. The bright metal eased at the beginning of the day on the back of a better market mood, later extending the slide amid the resurgent dollar demand.