EUR/GBP Seems Vulnerable Below 0.8500

The EUR/GBP fell to its lowest level in nearly two months during European trade, with analysts looking to extend the decline below the key psychological level of 0.8500.

The pair maintained its bid tone on Thursday and is poised to extend the slide to the 200-day SMA above mid-0.8600 and the strong performance of the British Pound comes with signs that the fuel crisis in the UK is easing which has been putting pressure on the currency.

On the other hand, the weak US dollar further boosted the common currency even though the dovish ECB monetary policy meeting capped any significant gains and the meeting minutes revealed that an increase in inflation rates in the near term does not require policy tightening, and policymakers believe accommodative monetary policy remains necessary.

EUR/GBP trading to the downside for the sixth session in a row and stability below 0.8500 supports the possibilities of further losses and opens the door to 0.8465, the August low, near 0.8400.