EUR/GBP inches lower as French election looms

After breaking below the 0.84 handle in the early NA session, the EUR/GBP pair extended its downfall to a new daily low at 0.8360. At the moment the pair is sitting a few pips above that level, recording a daily loss of 0.23%.

The EUR/USD pair erased all of its daily gains in the NA afternoon, possibly increasing the pressure on the EUR/GBP pair as well. Additionally, the GBP remained resilient against the greenback, keeping the GBP/USD pair afloat above 1.28, and adding to the weight on EUR/GBP.

Earlier today, the EU's chief negotiator Michel Barnier warned that a hard Brexit would be a failure and have grave consequences. In the meanwhile, BoE's Governor Mark Carney suggested that it was far more likely to have a cooperative scenario on financial rules post-Brexit.

On the last day of the week, headlines surrounding the Brexit could be ignored by the participants as the primary focus will remain on Sunday's presidential election in France. As we remember, both Brexit and Trump's victory yielded surprising results and caused big fluctuations in the markets as the polls misled the investors. Hence, before they see the results of Sunday's election, investors may decide to stay on the sidelines.

Technical levels to consider

The initial support for the pair is seen at 0.8325 (Apr. 18 low) ahead of 0.8300 (Dec. 5 low/psychological level) and 0.8205 (Jun. 29 low). To the upside, above 0.8400/10 (psychological level/daily high), the pair could extend the rise towards 0.8500/10 (psychological level/Apr. 18 high) and 0.8590 (Apr. 4 high).