EUR/GBP: bets are on the bid, eyes for top of the 2017 channel at 0.8712
Currently, EUR/GBP is trading at 0.8634, up 0.44% on the day, having posted a daily high at 0.8654 and low at 0.8600.
EUR/GBP is consolidating the recent spike on the 0.86 handle while EUR/USD hits a wall on the rally from 1.1160 and through the 1.1200 psychological level on yet further demand for the single currency.
- Merkel sends euro higher - BBH
The driver today came from German Chancellor Angela Merkel. She explained the single currency was weak only due on the ECB when talking about the country's trade surplus. The undertone in markets has been a balance between politics and central banks with one eye on individual economies. With hints that the ECB could start to hint at tapering, a more stable political backdrop in the EZ and slightly less momentum on US growth, the euro is catching a bid.
For the pound, all eyes are towards the forthcoming general elections in June. Following May's recent conflicting comments around her manifesto, the latest Guardian/ICM polls are showing Labour playing catch up. The Conservatives' lead shrunk to 14 points over Labour. The poll now sees Conservatives at 47% (down 1%) and Labour at 33% (up 5%).
EUR/GBP levels
EUR/GBP is bid and has eyes for the top of the 2017 channel at 0.8712, according to analysts at Commerzbank. To the downside, the analysts suggest that last weeks low at 0.8524 guards the 0.8383 May low and failure here will retarget key support at 0.8334/04. "If slipped through, the 0.8252 the July 2016 low would be in focus."