EUR/GBP a test of 0.88 stays on the cards – Danske Bank

Arne Rasmussen, Chief Analyst at Danske Bank, believes the European cross could attempt a visit to the key 0.8800 handle.

Key Quotes

“EUR/GBP keeps trading in a volatile fashion. Its move higher in the last two days was induced by a YouGov estimate of the seat allocation in the UK parliament based on polls, published Tuesday, showing a high risk of a hung parliament. In the short term, we stress that GBP will be in the hands of the opinion polls”.

“However, as momentum has clearly turned more bearish GBP, and given that speculative short GBP positions have been reduced substantially, according to the IMM data, a test of 0.88 should not be ruled out ahead of the elections, as long as polls continue to indicate a risk of hung parliament”.