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• EUR/GBP gains momentum near 0.8490 in Tuesday’s early European session. 
• The Euro gains ground after results from the first round of French elections.
• Traders will keep an eye on the UK Parliamentary elections on Thursday.

The EUR/GBP cross trades in positive territory for the fifth consecutive day around 0.8490 during the early European session on Tuesday. The Euro (EUR) edges higher after results from the first round of French elections suggested the far right would beat President Emmanuel Macron but fall short of winning an outright majority in parliament. Investors will closely watch the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for June, which is due on Tuesday.  

Marine Le Pen’s far-right National Rally (RN) party won 33.15% in the first round of France’s parliamentary elections on Sunday, according to final results published Monday by France’s Interior Ministry. Meanwhile, French President Emmanuel Macron’s centrist alliance suffered staggering losses, coming third with 20.76% of the vote. The left-wing coalition of the New Popular Front (NFP) made a strong showing with 27.99% of the vote. 

However, the RN might fall short of the 289 seats needed for an absolute majority, which lifts the shared currency against the Pound Sterling (GBP). BBVA's chief strategist Alejandro Cuadrado commented "In the event of Marine Le Pen's National Rally (RN) winning an absolute majority, the EUR could face additional short-term headwinds.”

On the other hand, the GBP weakens as investors remain uncertain about the timeline that the Bank of England (BoE) will start cutting interest rates. Also, market players turn cautious ahead of the UK elections outcome on Thursday. The opposition Labor Party is expected to win from UK Prime Minister Rishi Sunak-led Conservative Party, according to the latest exit polls. 

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