The increasing bid tone around the Sterling force EUR/GBP to quickly come down from the 0.8770 area to session lows around the 0.8700, where it is now looking to rebound.
EUR/GBP weaker on GBP bounce
The cross has deflated from last week’s fresh 3-month tops in the upper-0.8700s following a sharp rebound in the demand for the British Pound at the beginning of the week.
In fact, GBP gathered fresh traction after recent election polls still showed Conservatives in the lead vs. Labour, although the gap seems to have widened a tad vs. previous results.
In the data space, final services PMI in the euro region and the UK for the month of May passed unnoticed today, while all the attention should stay on the ECB meeting and the UK general elections, both events due on Thursday.
EUR/GBP key levels
The cross is now losing 0.54% at 0.8713 with the next down barrier at 0.8704 (low Jun.5) followed by 0.8653 (low May 30) and then 0.8602 (200-day sma). On the other hand, a break above 0.9772 (high Jun.2) would expose 0.8788 (high Mar.13) and finally 0.8860 (2017 high Jan.16).
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