EUR/GBP resumes the downside, in 3-day lows near 0.8550
|- EUR/GBP moves lower to the 0.8550 region on Monday.
- The sterling remains bid despite the firm greenback.
- Tories keeps leading the election polls.
The continuation of the selling bias around the single currency plus the positive start of the week for the pound are motivating EUR/GBP to challenge 3-day lows in the mid-0.8500s.
EUR/GBP focused on December elections
The European cross has resumed the downside following Friday’s positive price action, although it remains confined within the sideline theme prevailing since early November.
The euro has faded the earlier optimism after the German IFO showed the morale in the first economy of the bloc remains depressed in spite of the tepid bounce seen in November. In addition, and in the wake of the data releases, IFO officials noted that the outlook on the German manufacturing sector remains fragile, but some recovery is expected in the next months.
On the other shore of the Channel, the Conservative Party keeps leading the election polls with around 40/44% of the vote intention, while the Labour Party is gyrating around the 30% and LibDems are up and down the 15% area.
Data wise in the UK, the CBI Distributive Trades Survey improved to -3 for the current month. Later in the week, the BoE Treasury Committee Hearings will grab all the attention along with housing sector data releases and several BoE monetary gauges. Closer to home, advanced November’s inflation figures in Germany and the euro area will keep EUR in centre stage in the next sessions.
EUR/GBP key levels
The cross is losing 0.37% at 0.8551 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 (high Nov.22) seconded by 0.8667 (78.6% Fibo of the May-August rally) and then 0.8676 (high Oct.24).
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