EUR/GBP drops to weekly lows near 0.8870

• EUR/GBP pulls back further below 0.8900.
• Appetite for risky assets loses momentum on Wednesday.
• Preliminary figures for the German CPI and British GDP will be the stars of the week.

The bullish bias of the pound sterling weighs on the cross EUR/GBP and drags him to weekly lows near the 0.8470 level on Wednesday.

EUR/GBP weakens on sterling recovery

He EUR/GBP falls for the third session in a row on Wednesday and widens the sell bias after hitting 5-month highs near 0.8980 last February 3.

In fact, the recent sharp decline in the common currency, notably in the wake of the US NFP results, has put the cross under strong downward pressure and has pushed the current EUR/GBP slide to lows of 4 days.

Looking ahead, it is expected that the next movements of the ECB and the BoE will determine the evolution of the prices of the crossas well as the progress of the Fed normalization process.

for now, the ECB has already anticipated a 25 basis point rate hike in Marchwhile investors they also seem to favor a similar rate hike from the “Old Lady” after the most optimistic projections of the central bank revealed in the last meeting.

EUR/GBP Key Levels

At time of writing, EUR/GBP is down 0.15% on the day, trading at 0.8889. A break of 0.8758 (55-day SMA) would expose 0.8721 (Jan 19 low) and 0.8636 (200-day SMA). On the other hand, the next bullish barrier is at 0.8978 (Feb 3 high), followed by 0.9000 (round level) and 0.9277 (Sep 26, 2022 high).