EUR/GBP: looking for a break out one way or the other

Currently, EUR/GBP is trading at 0.8501, up 0.24% on the day, having posted a daily high at 0.8512 and low at 0.8457.

The political climate is temporarily on ice and focus is back on economies and Central Banks.  EUR/GBP can gain momentum to the upside on positive data this week with EZ GDP and CPI's as well as German IP. However, the UK calendar is also a busy one with unemployment, CPI, PPI and retails sales.  

1.2950/00 is a key area of resistance for sterling vs the dollar as is 1.1000 for the euro. The FX space is still very much range bound,  but this week could be pivotal for the cross depending on the data outcomes, bullish or bearish, (see here or below for Natixis bearish forecast), and whether these levels can be tested and finally broken. Eyes will soon then turn to the UK snap elections next month as a major catalyst for the direction of the cross.

The Conservative Party is leading in the polls before voting begins in the snap General Election that PM May called for June 8. In fact, some polls have the nation's leader's party at almost double the vote share of Jeremy Corbyn's Labour Party.  A landslide victory is expected and that will, of course, increase her party’s current working majority of 17 in the House of Commons.

EUR/GBP levels

EUR/GBP heading towards 0.8325 - Natixis

Analysts at Commerzbank explained that EUR/GBP is seeing some recovery but is expected to struggle at overhead resistances: "EUR/GBP has recovered but continues to trade below the 55- and 200-day moving averages at 0.8548/97, resistance which is reinforced by the seven-month resistance line at 0.8557. While this caps, a retest of key support at 0.8334/04 is expected. If slipped through, the 0.8252 the July 2016 low would be in focus."