- GBP/EUR holds 1.5% gain for the week

- "I wouldn't chase EUR/GBP lower": Soc Gen

- GBP/EUR can still hit 1.19 this year: Rabobank

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GBP/EUR reference rates at publication:Spot: 1.1645Bank transfers (indicative guide): 1.1337-1.1420Money transfer specialist rates (indicative): 1.1459-1.1563More information on securing specialist rates, hereSet up an exchange rate alert, hereFollowing days of strong gains for the British Pound against the Euro, the question starting to arise in FX commentary circles is whether a break of the 2021 highs can now be achieved.

Sterling has advanced against the Euro by over 1.50% since Monday and we have reported that a number of analysts are of the view that some further upside in the near-term is possible.

But this view is not ubiquitous and there are those that are sceptical on the Pound's ability to make meaningful further progress, a view that if correct could disappoint those looking for stronger valuations in Sterling.

"GBP/USD can rise as the dollar remains under pressure from global economic optimism, but I won’t chase EUR/GBP lower," says Kit Juckes, Global Head of FX Strategy at Société Générale.

The Euro-to-Pound exchange rate (EUR/GBP) fell to a low of 0.8560 on Tuesday May 12, while the inverse Pound-to-Euro exchange rate (GBP/EUR) rose to a high of 1.1680 as the momentum of Monday's 1.22% advance offered a fresh bout of upside impetus

The 2021 high resides at 1.1803, reached on April 02.

Above: GBP/EUR has rallied in early May.

The trigger for the latest impulse of buying was said to be the clearing of political risks from the investor horizon, with investors judging that a potential constitutional clash over a future Scottish referendum will all but be deferred by the failure of the Scottish National Party to gain a majority in Holyrood elections.

"The Conservatives did well in local elections, and the SNP (just) failed to win an outright majority in the Scottish parliament. However, I think the pound’s move is as much about the negative dollar toe and risk-friendly mood, as the news," say Juckes.

"I don’t know anyone who thinks the risk of a second Scottish referendum has gone away," he adds.

Valuation is however a concern for Juckes and he says GBP/EUR could be pricey around current levels.

"Sterling is expensive relative to PPP, though that is the norm in the age of the euro (not before)," says Juckes.

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"Sterling does, if you work on the premise the UK continues to run slightly higher inflation that the Eurozone. And while the pound isn’t as expensive today as at past major turning points, it definitely isn’t cheap against the euro here.

We can report that Danske Bank - the Scandinavian lender and financial services provider say they retain a bullish stance on the British Pound, although they are conscious that there "is no obvious trigger for another sharp move" higher in GBP/EUR near-term.

Strategists at Rabobank have meanwhile said this week said they are also expecting further advances to be hard fought for, but a new 2021 high was still on the cards by year-end.

Senior FX Strategist at Rabobank, Jane Foley, issued a new note this week in which she said:

"Given that the EUR has also been lifted by vaccine related optimism we continue to expect only a slow drift lower for EUR/GBP towards 0.84 on a 6 month view. We see risks of dips in cable back to the 1.39 level in the coming months on further bouts of optimism regarding US reflation."

EUR/GBP at 0.84 translates into a GBP/EUR forecast target of 1.1904, which if achieved would mean a leaping of the 2021 high at 1.18 at some point over coming weeks.

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