The British pound is starting this week with a bang! EURGBP is trading at new six-month lows as European markets open. The currency pair opened with a 19-pip gap from from Friday’s close at 0.8545. It found resistance at 0.8558 and dropped to a new low around 0.8533.
The rally is fueled by news that the Conservatives are ahead in the latest polls. According to data released by Survation, Conservatives have a strong lead ahead of UK’s general elections next month at 42%. Labour follows in second at 28%, Liberal Democrats in third at 13%, Brexit Party in fourth at 5%, and Green in fifth at 3%. Meanwhile, a poll from YouGov show that Conservatives are up 45%.
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EURGBP Outlook
This was widely taken as positive news for the pound as it would make it easier for Prime Minister Boris Johnson to push for a Brexit deal in Parliament. If sellers can maintain momentum, the next support level for EURGBP is around 0.8480 where it previously made lows in March 10, March 24, and May 5.
Do note that leaders of the two leading political parties, Boris Johnson and Jeremy Corbyn, are scheduled to debate on live TV tomorrow and could cause volatility on pound pairs. Should EURGBP find fresh bids, it could bounce up to 0.8590 where it found support in October 21 and November 5.Download our latest quarterly market outlook for our longer-term trade ideas.
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