- Pound under pressure amid risk aversion, falls sharply versus EUR, USD, CHF and JPY.
- EUR/GBP heads for highest weekly close since October, back above the 20-week SMA.
The EUR/GBP pair rose on Friday significantly for the third day in a row. It peaked during the American session at 0.8640, the highest level since November and then pulled back modestly, holding above 0.8600. Over the last three days it rose more than 250 pips.
There were no particular catalyst for the move lower in the pound. The currency was negatively affected by risk aversion as global financial markets suffered the worst week since the 2008 financial crisis.
Among major European currencies, the pound was the worst performer over the week. The GBP/JPY pair lost 600 pips over the last five days and GBP/CHF 360 pips.
Levels to watch
The euro was able to broke November and January highs near 0.8600 and it is consolidating above. Technical indicators show overbought readings for EUR/GBP but euro’s momentum remains intact as it holds near the peak. On the upside, the next resistance is seen around 0.8650 and then at 0.8680. On the flip side, now 0.8590 is the immediate support followed by 0.8520.