EUR/GBP recedes from tops near 0.8540

• EUR/GBP meets resistance near the 10-day SMA.
• Tory-Labour gap reduced further and weighs on the pound.
• UK November manufacturing PMI surprised to the upside.

EUR/GBP gapped to the upside at the beginning of the week although it has been trading with a selling bias since then.

EUR/GBP focused on UK elections

The European cross remains under pressure on Monday and keeps trading within the broader bearish scenario, which is particularly exacerbated by the downside bias surrounding the euro and the alternating trends around the British pound.

Still in the UK, latest election poll results kept showing a Conservative lead, although the gap vs. the Labour Party keeps shrinking.

In the UK docket, November’s manufacturing PMI rebounded to 48.9, surpassing at the same time initial estimates (48.3). The reading, however, remains within the contraction territory and keeps showing that the slowdown in the sector still appears unabated.

Later in the day, ECB’s C.Lagarde is expected to testify to the European Parliament, while November’s US ISM Manufacturing will be the salient event in the NA session.

EUR/GBP key levels

The cross is advancing 0.13% at 0.8522 and faces the next barrier at 0.8566 (21-day SMA) seconded by 0.8605 (high Nov.22) and then 0.8667 (78.6% Fibo of the May-August rally). On the other hand, a breach of 0.8499 (monthly low Nov.28) would expose 0.8488 (monthly low May 6) and finally 0.8471 (2019 low Mar.13).