EUR/GBP shifts the attention to 0.8600 on UK elections

• EUR/GBP resumes the downside and drops near 0.8600.
• The UK will hold elections in December.
• The UK Parliament is expected to vote on the election bill today.

The better tone in the Sterling is forcing EUR/GBP to slip back into the negative territory on Tuesday and refocus the attention to the 0.8600 neigbourhood.

EUR/GBP looks to UK Parliament, elections

The European cross is extending the leg lower from last week’s tops beyond 0.8670 on the back of the renewed upside bias in the quid, all after news cited the UK will hold elections in December for the first time since 1923.

In fact, Labour leader J.Corbyn said earlier in the day that his party will back the elections bill at today’s vote in Parliament, adding to the Pound’s recovery.

In the UK data space, Mortgage Approvals rose to 65.92K in September, surpassing estimates. Additional data saw BoE’s M4 Money Supply expanding at a monthly 0.7% during last month and Consumer Credit rose less than expected £0.828 billion in the same period.

EUR/GBP key levels

The cross is losing 0.06% at 0.8624 and a drop below 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next up barrier emerges at 0.8667 (78.6% Fibo of the May-August rally) followed by 0.8811 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).