EUR/GBP extends Draghi-led strong up-move further beyond 0.88 handle
|The shared currency continued scaling higher across the board, with the EUR/GBP cross surging through the 0.88 handle to fresh multi-day tops.
The cross gained strong traction following optimistic comments by the ECB President Mario Draghi, noting that the Euro-zone growth remains above trend and well distributed across the region, while factors weighing on inflation trajectory are temporary.
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In absence of any dovish bias, Draghi's comments triggered a sharp short-covering rally across EUR cross and lifted the cross to session tops near 0.8840 region.
Meanwhile, a positive sentiment surrounding the GBP/USD major, following BoE’s Financial Stability Report, seems to have collaborated towards keeping a lid on the pair’s strong up-move just below its immediate strong resistance near mid-0.8800s.
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A strong follow through action, back towards yearly tops, now seems a distinct possibility amid the prevalent bullish sentiment surrounding the common currency and in absence of any major market moving economic releases.
Technical levels to watch
On a sustained move beyond mid-0.8800s has the potential to continue boosting the cross further towards the 0.8900 handle with some intermediate resistance near 0.8880 level.
Meanwhile on the downside, 0.8810-0.8800 region now becomes immediate support to defend, which if broken would turn the cross vulnerable to head back towards retesting 0.8770-65 support area en-route 0.8730 level.
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