• Pound among worst performers on Wednesday. 
• UK: Borrowing was higher than expected in November.  
• EUR/GBP bullish, looking at 0.8800 and more.

The EUR/GBP cross gained momentum during the European session and climbed to 0.8780, hitting the highest level since November 15. It then pulled back, finding support at 0.8745 and after the beginning of the American session, it is approaching daily highs. 

The Euro jumped last week after the European Central Bank and the Bank of England meetings, rising above 0.8700. After pausing and holding above 0.8700, EUR/GBP appears to be resuming the upside. If the rally continues, the next level to watch is the November high at 0.8825/30.

The key support for the current move higher is seen at 0.8670, the 50-day Simple Moving Average. A break lower could send EUR/GBP back to the previous range between 0.8550 and 0.8660. 

Pound hit by data 

Data released on Wednesday showed the UK government borrowed 22 billion pounds in November, above the 8 billion of market expectations. It was a record for the month. The energy price support scheme and inflation effects are having an impact on UK public finances. 

Analysts at Rabobank see UK fundamentals to remain sour in the coming months. They see the pound vulnerable and forecast EUR/GBP rising to 0.90 on a six to nine months perspective. 

Technical levels