EUR/GBP remains on the defensive near 0.8440

EUR/GBP keeps the area of 2019 lows near 0.8440/30.
GBP-buying stays well and sound ahead of UK elections.
Tories expected to win with majority next month.

Pablo Piovano FXStreet

The improved sentiment around the sterling has forced EUR/GBP to recede to the 0.8430 earlier in the session, printing at the same time fresh 2019 lows.

EUR/GBP depressed around 0.8430, eyes on elections

The bearish note in the European cross is extending for the third consecutive session so far on Thursday. Furthermore, the cross closed with gains in only three out of the last seventeen weeks and is currently transiting the fifth consecutive month in red figures.

In the meantime, the sentiment surrounding the British pound has been doing nothing but improving on the back of results from election polls pointing to a Conservative majority at the elections on December 12^th. So far, Tories keep leading the vote intention by around 12 pts vs. Labour. Lib-Dems, in the meantime, remain around the 15%.

Regarding the single currency, the upbeat mood stays well in place for yet another session, always on the back of unremitting dollar-weakness stemming from US-China trade tensions and poor US results from the domestic calendar.

EUR/GBP key levels

The cross is retreating 0.13% at 0.8442 and a breach of 0.8430 (2019 low Dec.5) would expose 0.8382 (monthly low May 2017) and then 0.8297 (2017 low April 18). On the upside, the next barrier aligns at 0.8548 (21-day SMA) seconded by 0.8605 (high Nov.22) and finally 0.8669 (55-day SMA).

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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