The EUR/GBP pair has gained positive momentum for two consecutive days. The cross maintained its strong direction during the mid-European session.
The relative growth of the pair began against the backdrop of recent hawkish statements by several representatives of the European Central Bank (ECB), who provided arguments in favor of additional interest rate hikes in the coming months. Last Friday, ECB Governing Council member Bostjan Vasle stated that further rate hikes are necessary as the underlying inflation remains at a high level and shows no signs of losing its stability, and it needs to be brought to the target level of 2%.
Governing Council member Gabriel Makhlouf also noted that the central bank is not yet ready to ease its monetary policy.
In addition to these facts, ECB President Christine Lagarde, speaking before the European Parliament, confirmed that price pressure is increasing in the eurozone. She added that underlying inflation has not yet reached its peak, and wage pressure has intensified.
These events continue to support the euro.
On the other hand, the British pound is trying to attract buyers as the market has already priced in the prospect of another interest rate hike by the Bank of England. This, in turn, supports arguments for further short-term appreciation of the EUR/GBP cross.
Therefore, some subsequent strength may be found around 0.86499, either through a breakthrough or a testing strength.
The mentioned area should serve as a support level for short-term traders.