EUR/GBP surges to a fresh 4-week high

The EUR/GBP cross maintained its strong bid tone and is now building on to it move above 0.8600 handle to currently trade at four week high around 0.8625 level. 

The pair’s strong up-move on Tuesday has been solely driven by intense selling pressure around the British Pound, which helped the cross to resume its near-term upward trajectory after yesterday's brief consolidative pause. 

Meanwhile, the shared currency maintained its outperformance against its British counterpart despite of disappointing release of German PPI for the month.

Going forward, Wednesday's announcements of BOJ and Fed monetary policy decision, which would drive the EUR/USD and the GBP/USD major, will be closely watch by market participants in order to determine the next leg of move for the EUR/GBP cross.

Technical levels to watch

From current levels, the momentum could further boost the cross towards 0.8650-55 horizontal resistance, which if cleared would open room for a fresh leg of up-move initially towards 0.8680 resistance and eventually beyond 0.8700 handle towards August swing high resistance near 0.8725 level.

On the flip side, 0.8610-0.8600 area now seems to protect immediate downside. Failure to hold this immediate support might now drag the cross even below yesterday's low near 0.8535 towards testing 0.8500 psychological mark.