EUR/GBP remains sidelined above 0.8600, focus on UK elections
- EUR/GBP keeps the rangebound trading above 0.8600.
- Markets’ attention now shifts to election polls.
- The UK will hold elections on December 12.
The renewed upside momentum in both the Sterling and the shared currency keeps the sideline mood unchanged in EUR/GBP above the 0.8600 handle.
EUR/GBP focused on data, UK politics
The European cross is navigating within a sideline theme since mid-October, mostly above the 0.8600 mark and capped by the 0.8670 region, where sits a Fibo retracement of the May-August bull run.
Following the Parliament vote earlier in the week, the UK will hold general elections in December for the first time since 1923. Against this backdrop, and always following latest polls, the Conservative Party keeps leading the vote intentions among UK citizens.
On the data universe, advanced inflation figures in Euroland showed the headline CPI is seen rising at an annualized 0.7% in October and 1.1% when comes to prices stripping food and energy costs. Additional data saw flash GDP prints expecting the economy in the bloc expanding 0.2% inter-quarter in Q3 and 1.1% from a year earlier.
On Friday, the US Non-farm Payrolls and the ISM Manufacturing are likely to drive the mood in the global markets along with headlines from the US-China trade front.
What to look for around GBP
Following Tuesday’s vote in the House of Commons, the UK is heading towards December elections for the first time in nearly a century. That said, the quid is expected to face increasing volatility in tandem with results from poll estimates and headlines in either direction prior to the elections’ day. On the BoE’s side, there are no fresh updates since the latest ones, which reiterated the probability that the next move on rates could be a cut.
EUR/GBP key levels
The cross is losing 0.34% at 0.8613 and a drop below 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next up barrier emerges at 0.8676 (high Oct.24) followed by 0.8811 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).