EUR/GBP surges beyond 0.8750 to hit fresh multi-week highs

The British Pound remained under continuous selling pressure on Tuesday, with the EUR/GBP cross surpassing 0.8700 handle with ease to touch the highest level since Nov. 10.

Heightened fears of a 'hard Brexit', in the wake of comments from the UK Prime Minister Theresa May over the weekend, continues to weigh heavily on the British Pound for second straight session. This coupled with the ongoing recovery trend around the EUR/USD major also collaborated to the pair's latest leg of sharp up-surge to 9-week highs. At the time of reporting, the cross was trading above 0.8750 level, positive for fifth consecutive session.  

Even from technical perspective, the cross on Monday decisively cleared 50-day & 100-day SMA barriers. A follow through action on Tuesday now confirms the break-out and thus, opens room for continuation of the pair's strong up-move in the past two days. 

Technical levels to watch

Immediate upside resistance is pegged near 0.8780-85 region above which the cross is likely to reclaim 0.8800 handle and head towards testing 0.8825 resistance (Nov. 10 high). On the downside, 0.8700 handle now becomes immediate support, which if broken decisively is likely to drag the cross back towards 0.8600 handle, with 0.8650 and 0.8625 levels acting as intermediate support.