EUR/GBP gaps higher, but fails at 0.85 handle

EUR/GBP gapped higher following Macro Le Pen victory in the first round of the French election, but failed to chew through the key psychological hurdle of 0.85. The cross was last seen trading around 0.8469 levels.

Focus on polls

The second round, also known as runoffs, is due on May 7. According to the latest polling about voters' intentions in the second round, Mr. Macron is forecast to beat Ms Le Pen by 62% to 38%.

The polls have regained credibility as they correctly predicted Macron and Le Pen victory in the round one.

Hence, the EUR pairs remain at the mercy of the second round polls. The common currency could remain well bid as long as Macron maintains a healthy lead over the anti-EU candidate Marine Le Pen.

Meanwhile, the recent batch of weak economic released in the UK could keep the GBP under pressure.

EUR/GBP Technical Levels

A break above 0.85 (session high + psychological level) would expose 0.8546 (100-DMA line) and 0.8563 (50*DMA line).  On the lower side, breach of support at 0.8436 (10-DMA) could yield a sell-off to 0.8388 (5-DMA). A daily close below the same would trigger a sell-off to 0.8337 (Apr 19 low).