EUR/GBP off daily highs, back to 0.8540

EUR/GBP trims initial gains to the 0.8590 area.
Uncertainty around the UK elections keeps running high.
Conservatives keep leading the run up to the general elections.

Pablo Piovano FXStreet

The better tone in the British pound forced EUR/GBP to recede from tops just below the 0.8600 handle to the current area in the mid-0.8500s.

EUR/GBP weaker on GBP-buying, looks to politics

Price action around the sterling remains choppy so far this week in response to the unabated uncertainty surrounding the UK elections on December 12^th, all prompting the European cross to maintain the current rangebound theme in the area of 6-month lows.

Also weighing on the cross, the euro stays well offered as market participants continue to adjust to the generalized slowdown in the region – despite recent positive results in the German docket – and the dovish tilt from the ECB.

In the meantime, GBP remains quite volatile tracking the election polls results. In this regard, YouGov will publish its latest poll results tonight. So far, the Tory Party keeps leading the vote intentions with around 40%, Labour is gyrating near 30% and LibDems hover around 15%.

Nothing worth mentioning in today’s calendar on both sides of the Channel, with the salient event expected in the US economy with another revision of Q3 GDP, PCE figures and Personal Income/Spending.

EUR/GBP key levels

The cross is losing 0.22% at 0.8546 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).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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