EUR/GBP surges to fresh 2-month highs, taps 0.8700 mark

A fresh wave of selling interest around the British Pound lifted the EUR/GBP cross to fresh two-month highs near the 0.8700 handle.

Spot continued gaining traction for the third consecutive session and extended its recent upward trajectory from sub-0.8400 level touched during the first half of this month. The prevalent bearish sentiment surrounding the British Pound has been a key factor driving the cross higher to its highest level since late March.

Thursday's dismal release of UK GDP growth, showing that the UK economy slowed more sharply than previously estimated in the first quarter, added to renewed concerns over the impending Brexit negotiations and collaborated to this week's strong gains. 

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The cross is now headed for fourth consecutive week of advances and with the latest upbeat Euro-zone economic data boosting sentiment around the shared currency, extension of the pair's near-term bullish momentum remains a distinct possibility amid data light economic docket. 

Technical levels to watch

Momentum beyond the 0.8700 handle could get extended towards 0.8725-35 area, above which the cross seems all set to aim towards retesting March monthly highs resistance near 0.8775-80 region. On the flip side, 0.8675-70 zone now seems to protect immediate downside and is closely followed by a horizontal support near 0.8645-40 level.