EUR/GBP slips to weakest level since May 2017 as pound gains accelerate

Technical Analysis

Author: Justin Low | eurgbp

EUR/GBP hits its lowest level in more than two-and-a-half years

EUR/GBP D1 04-12
It's a bit of a slippery slope now for EUR/GBP as price starts to slip under the 12 March low of 0.8476. If sellers can build on that, there isn't much standing in the way of a test of the 0.8400 handle next with key daily support seen closer to 0.8384-02.

The pound looks to be taking out some key levels against both the dollar and euro today and that is an encouraging sign for buyers from a technical perspective.

However, there is still the fact that we have the UK election due next week and a hung parliament result may well spoil the party for pound bulls in the short-term.

That said, a Conservatives majority would have the opposite effect and add fuel to the fire in the run we're seeing in the quid today.

As mentioned earlier, it looks like pound traders are starting to factor in a more positive election outcome as gains accelerate today. I wouldn't say that it is heavily priced in since the initial moves here owe much to cable running stops above 1.3000-10.

But if we get towards 1.31-32 in cable and below 0.84 in EUR/GBP, then pound bulls may have to be really wary that things could all break down massively if the election result next week does not go their way.

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