EUR/GBP bounces off multi-month lows, back above 0.8500

Both the single currency and the sterling are losing some of their earlier shine and are lifting EUR/GBP to fresh daily highs in the 0.8520 region.

EUR/GBP focused on UK elections

The European cross has managed to bounce off new multi-month lows in levels just below the 0.8500 handle earlier in the day, recorded on the back of rising momentum in the British pound following latest election polls.

In fact, latest poll results showed Conservative candidate (and PM) B.Johnson leading by around 12 pts (42%) vs. Labour’s J.Corbyn (30%), while LibDems stick to the 15% region so far. Despite Tories remain on the lead, the gap vs. the Labour Party has been narrowing in past days and this remains a source of potential downside for the sterling.

In the docket, ECB’s M3 Money Supply expanded more than expected at an annualized 5.6% in October, while Private Sector Loans expanded 3.5% from a year earlier. In addition, the Consumer Confidence in the euro area ‘improved’ to -7.2 for the current month and Business Climate dropped to -0.23 for the same period. Later in the day, all the attention will be on the November’s advanced readings of the German inflation tracked by the CPI and the HICP ahead of Friday’s prints in the euro region.

On the other side of the Channel, house prices gauges by the Nationwide index are due on Friday seconded by the BoE’s Consumer Credit and M4 Money Supply figures.

EUR/GBP key levels

The cross is advancing 0.11% at 0.8519 and faces the next barrier 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). On the other hand, a breach of 0.8499 (monthly low Nov.28) would expose 0.8488 (monthly low May 6) and finally 0.8471 (2019 low Mar.13).