EUR/GBP: tentative around the 0.87 handle ahead of key events

Currently, EUR/GBP is trading at 0.8692, down -0.50% on the day, having posted a daily high at 0.8743 and low at 0.8677.

EUR/GBP took a hit with EUR/USD dragging the pair down with headlines that the ECB is seeing lower than previously forecast inflation projections for 2017, ‘18 and ’19 ahead of tomorrow's meeting. Markets had otherwise been building up to a more hawkish tone from the bank. The pair bounced back, offering good two-way business ahead of the showdown events ahead.

• ECB forecasts said to cut inflation outlook through 2019 - BBG

Tomorrow is going to be a busy day for the cross with the UK elections. The Conservatives are expected to win more seats and the time will be at 10pm BST when the exit polls will be announced shortly after the turn of the hour with a possible decisive result. If there is not a clear victory expected at that time, the key county's and results will be monitored for subsequent price action.

• ICM poll: Conservatives at 46% and Labour at 34%   

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP is neutral to negative: "EUR/GBP’s marginal new high of 0.8775 has not been confirmed by the daily RSI and we are alert to the idea of a small dip back towards the 200 day and 55-day ma at 0.8603/549 (at the very least). This is regarded as a failure move ahead of the 0.8790 March high and the 0.8852 January high."