EUR/GBP falls to lowest since September, eyes on ECB meeting

• The EUR/GBP pair recovered slightly to 0.8555 after hitting a low of 0.8545.
• The ECB meets this Thursday with no changes expected in its monetary policy.
• The Pound maintains its superiority over the Euro due to forecasts of less flexibility by the BoE in 2024.

In Tuesday's session, EUR/GBP stabilized at 0.8555 after reaching its lowest level since September lows around 0.8545. Weak consumer confidence data from the European Commission weakened the Euro, while the Pound has a slight advantage as markets bet on less easing from the Bank of England (BoE) in 2024.

For the moment, the economies of the United Kingdom and the Eurozone continue to navigate uncertainties, and both regions have noted a decline in demand for loans and credits in the fourth quarter. The British economy is holding up somewhat with inflation remaining stubbornly high, leading markets to expect less easing from the Bank of England in 2024.

The ECB (European Central Bank) meets on Thursday and President Lagarde could resist market bets on easing monetary policy and remain cautious. At the moment, investors expect rate cuts of 150 basis points in 2024, but Lagarde's monetary policy statement and tone could influence these forecasts. As for the Bank of England, its next meeting will be held on March 6 and markets foresee a lower easing than that of the ECB, of 125 basis points in 2024, which seems to give a slight advantage to the pound against the Euro.

EUR/GBP levels to watch

The indicators on the daily chart reflect the overall bearish sentiment. The Relative Strength Index (RSI) reinforces this view, as its positioning is in negative territory with a negative slope, indicating a sustained selling market.

The Moving Average Convergence (MACD) histogram tells a similar story as it prints ascending red bars.

The simple moving averages (SMA) align with these indicators above. The pair is below the 20-, 100-, and 200-day SMAs, signaling the predominant strength of the bears in a broader context. It reflects the uphill struggle that buyers may face in the near-term plan.

EUR/GBP Daily Chart