EUR/GBP - time to sell

Traders who traded the GBP were greatly surprised when British Prime Minister Teresa May announced that early elections will be held in the United Kingdom on June 8th. For some time, the Conservative Party has overriding the opposition, according to polls, so the prospect of them remaining in power continues to be up to date, and such a development of events will not have a particular weight on the markets. In the short term, additional information is needed to keep the pound rally.
EUR/USD also rose, on a par with the British currency, in part due to a weakening dollar.
In terms of technical analysis, in the currency pair, there is a breakthrough in the key support for a reversing "head and shoulders" figure, which has been developing for 9 months. We can look for short positions at the current price, putting a stop at 0.8460 and a target 0.7886.

Lloyds Bank: In December EUR/GBP could fall to 0.83

In recent months, EUR / GBP is consolidating widely. Following the recent ECB decision to extend the quantitative easing program, while reducing the monthly volume and to expand the list of instruments suitable for the bank, the pair fell significantly. Then the pair resumed growth amid worsening of fears about tough Brekzit, analysts say. Currently EUR/GBP is trading significantly higher, they added.
According to the bank's analysts forecast for this year, the ECB and the Bank of England will not change interest rates, so the differential factor will have a serious impact on the pair. The main driving forces for its movement will become political events in Europe, elections in the Netherlands in March, in France in April-May, in Germany - probably in September and possibly Italy, analysts say. According to their forecasts, in December this year EUR/GBP will fall to 0.83.

BBH forecast that EUR/USD will go to 0.83 dollars, while GBP/USD - to 1.00 dollar or even lower

EUR/USD fell below the important support of 1.1040 dollars, this level has now become resistance.
The bank remains bearish long-term to the couple as according to them a further reduction could send the GBP/USD to parity or even below. This month, the single currency fell by 2.4 percent against the US dollar and increased by 2.8% against the British pound, and October can be the fifth consecutive month of growth of EUR/GBP (+ 12% since the beginning of Brexit). The length of this uptrend is comparable only to the period August 2012 - February 2013, when the couple grew seven consecutive months.
The recovery of EUR/USD from the declines in January was interrupted in the middle of last week with a break below 1.1040 dollars and now the pair descended to levels of late July, trading not far from achieved immediately after the British referendum drop around 1.0915 dollars, say analysts.
A break below this level could send the pair to test the support at 1.0800-20 dollars, and if EUR/GBP rise to 0.90 pounds, analysts expect GBP/USD to return to 1.20 dollars.
In the long term, analysts of the bank are in anticipation of reducing the EUR/USD to historic lows around 0.83 dollars, and the GBP/USD to fall below 1.00 dollar.

Euro/dollar slipped below 1.12

At the trading session in Europe, the US dollar is trading in the positive zone. The euro/dollar is losing 23 points compared to Friday's close at 1.1193. GBP/USD fell 60 pips to 1.3068. UK markets are closed for a bank holiday in the country, which leads the cable to low volumes and high volatility.
The US dollar continues to get support from Friday's speech by Janet Yellen and the next increase in US interest rates. The British pound fall against the dollar is stronger than the euro, as the cross-pair EUR/GBP is trading higher.
In the evening US are about to publish reports of expenditures on personal consumption and the index of personal income and costs. These can have an impact on the dynamics of the dollar, if they are significantly higher/lower than the predicted values. If they match with the expectations, there will be no reaction to the news.

The pound strengthened on labor market data

In the beginning of the European trade, the euro/dollar sank for one hour by 38 pips to 1.0981. At this time, the pound strengthened against the dollar and the euro on the labor market data in the United Kingdom, which exceeded forecasts.
UK unemployment rate fell from 5.0% to 4.9% in June. The number of applications for unemployment benefits fell from 12.2 thousand to 0.4 thousand. The average wage, including bonusses, increased from 2.0% to 2.3% in May.
Pound/dollar recovered with one figure (100 points), to 1.3197. As soon as pressure on the euro weakened by euro/pound, euro/dollar has won back all the daily losses.

The pound has reduced the rise in the slowing UK inflation

On Tuesday, the pound reduced gains against the dollar after data showed that inflation in the UK slowed in April for the first time since September 2015.
GBP/USD is trading at 1.4458 after approximately 1.4494 in anticipation of the report output.
The office of the National Statistics reported that the Consumer Price Index (CPI) in the UK rose in April to an annualized rate of 0.3%, slowing from 0.5% in March.
Economists expected inflation to remain stable at 0.5%.
Consumer prices rose in monthly basis by only 0.1% in April, slowing sharply from 0.4% in March, lower than expected growth of 0.3%.
Core CPI, which excludes food costs, energy, alcohol and tobacco, rose 1.2% last month, less than the forecast, which predicted growth of the index by 1.4%.
Weak data indicated that the Bank of England will not rush to increase the interest rate from its record low of 0.5%, where it remains for almost seven years.
In a separate report, the ONS reported that the house price index jumped in March by 9% on an annualized basis, the fastest pace in the past year.
Sterling strengthened against the euro, with EUR/GBP shedding 0.47% to 0.7824.