EUR/GBP drops to monthly lows near 0.8500
|- EUR/GBP trades in multi-month lows around 0.8520.
- GBP-buying continues to weigh on the cross.
- The Conservative Party remains firm on top of election polls.
Increasing buying interest around the sterling is dragging EUR/GBP to fresh multi-month lows in the 0.8520 region on Monday.
EUR/GBP weaker on GBP-buying
Fresh GBP buyers are dragging the European cross to levels last seen in last May in the 0.8520 region, opening the door at the same time for a potential challenge to the 2019 low near 0.8470 (March 13).
The cross came under heavy downside pressure at the beginning of the week and it has almost fully retraced the May-August rally, all amidst the increasing bid tone in the pound in response to the solid lead of the Tory Party in the run up to the general elections on December 12.
Later in the day, PM B.Johnson, Labour’s J.Corbyn and LibDem’s J.Swinson will speak at the CBI Annual conference.
Later in the week and on this side of the Channel, ECB’s C.Lagarde is due to speak while the ECB will publish its accounts from the latest meeting. In addition, markets’ attention will also be on the release of advanced PMIs for the current month in core Euroland.
EUR/GBP key levels
The cross is losing 0.37% at 0.8531 and a breach of 0.8521 (monthly low Nov.18) would expose 0.8488 (monthly low May 6) and finally 0.8471 (2019 low Mar.13). On the upside, the next hurdle lines up at 0.8605 (21-day SMA) seconded by 0.8667 (78.6% Fibo of the May-August rally) and then (0.8676 (high Oct.24).
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