EUR/GBP jumps to six-week highs as pound tumbles

• Pound under pressure across the board on risk aversion.
• EUR/GBP breaking range that could lead to further gains.

A weaker pound boosted the EUR/GBP that rose from 0.8830 to 0.8877, reaching the highest levels since April 1. It remains at the top with the bullish momentum intact.

Risk sentiment across financial markets weakened again and hit the pound. The currency is the worst performer among majors and it accelerated the decline over the last hours as equity prices dropped further. In Wall Street the Dow Jones is falling 1.75% and the Nasdaq 1.12%.

Adding to the negative tone around the pound, GBP/USD broke below the critical 1.2245/50 area hitting one month lows. Previously the pound was holding to modest gains after UK GDP data that showed negative numbers but above expectations.

Technical Outlook

The EUR/GBP is trading above the upper limit of the recent range. If it holds above 0.8850, the bullish bias will remain in place. The next strong resistance might be seen at 0.8905/10. On the flip side, now 0.8855 (Asian session high) is the immediate support followed by 0.8805/10 (May 13 low / May 11 high).