EUR/GBP reaches fresh three-month highs above 0.8860 as the pound loses ground

The Euro appreciates for the second consecutive day to reach fresh three-month highs at 0.8875.
The Pound losses ground weighed by grim UK economic perspectives and hopes of a slower BoE tightening.
EUR/GBP appreciates about 5.5% in 2022 with the Sterling hit by the UK's political drama.

Guillermo Alcala FXStreet

The Euro finally managed to pierce the 0.8860 resistance area on Friday, extending its rebound from session lows at 0.8820 to fresh three-month highs at 0.8870 so far. The common currency is taking advantage of a moderately weak Sterling on a sluggish pre-holiday session.

The pair has shrugged off the mild risk aversion on the back of concerns about the consequences of the strong COVID-19 outbreak in China and the escalating tensions in Ukraine, to appreciate for the second consecutive day.

On the other hand, the Pound remains offered across the board, weighed by the grim economic perspectives in the UK and hopes that the Bank of England will slow down its monetary tightening path over the coming months.

The Sterling is about to close its worst year since 2016

The EUR/GBP is set to end the year with a 5.5% appreciation, favored by the broad-based pound weakness in 2022. The Sterling was hit hard by the political uncertainty during the last months of Boris Johnson's mandate and Liz Truss’ tax reform fiasco.

Johnson’s successor's Downing Street tax cut plan caused a historical Pound crash in October and prompted an intervention by the Bank of England to avert a credit crunch.

The Pound has firmed up somewhat in the fourth quarter, as the election of Rishi Sunak calmed the markets although the negative economic outlook coupled with soaring inflation is keeping GBP buyers at bay.

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8866
Today Daily Change	0.0025
Today Daily Change %	0.28
Today daily open	0.8841

Trends
Daily SMA20	0.8701
Daily SMA50	0.8689
Daily SMA100	0.8677
Daily SMA200	0.8574

Levels
Previous Daily High	0.886
Previous Daily Low	0.8822
Previous Weekly High	0.8834
Previous Weekly Low	0.8691
Previous Monthly High	0.8828
Previous Monthly Low	0.8572
Daily Fibonacci 38.2%	0.8845
Daily Fibonacci 61.8%	0.8837
Daily Pivot Point S1	0.8822
Daily Pivot Point S2	0.8804
Daily Pivot Point S3	0.8785
Daily Pivot Point R1	0.886
Daily Pivot Point R2	0.8878
Daily Pivot Point R3	0.8897

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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