EUR/GBP hits ten-week lows near 0.8580, while Euro extends decline against Pound

• The EUR/GBP pair is chaining its seventh consecutive day of losses while the Euro falters.
• Eurozone data continue to support a dovish ECB.
• Lagarde, president of the ECB, will speak again on Monday.

On Friday, the Euro accelerated its decline against the British Pound and broke out of a short-term descending channel. The pair EUR/GBP tested 0.8580 during Friday’s session in the United States, and the Euro fell almost six tenths against the British Pound on the day.

The Euro has fallen for seven consecutive days against the British Pound, and the EUR/GBP pair has lost more than 2% since the highs of mid-November, with offers close to 0.8765. The Euro is about to record its worst consecutive performance in 2023, and the EUR/GBP cross will close in the red in all but one of the last ten consecutive trading days.

The British Pound is no stranger to weak economic data, but this week’s dovish data from the European Central Bank (ECB) highlights the weak Eurozone data being released on the economic calendar.

Eurozone inflation fell faster than expected this week, after the Harmonized Index of Consumer Prices (HICP) came in below forecasts on Thursday, with a year-on-year figure for the annualized November period of 3.6% compared to the 3.9% expected, which extends the decline from 4.2% year-on-year in October.

ECB President Christine Lagarde made an appearance earlier in the week in which she highlighted the dovish approach the ECB has adopted in recent weeks, and expressed the sentiment that quantitative easing could soon be back on the cards. table for the euro.

Next week will start with another appearance by Lagarde, president of the ECB, on Monday, who will speak specifically about monetary policy at the Academy of Moral and Political Sciences in Paris.

Next, the UK will publish BRC Like Retail Sales for the year to November on Tuesday, which is forecast to decline slightly from 2.6% to 2.5%. The Eurozone Producer Price Index (PPI) will be published next, and the month-on-month figure for October is expected to confirm a decline from 0.5% in September to a virtually flat 0.2%.

EUR/GBP technical levels

EUR/GBP’s bearish acceleration on Friday saw the pair break out of a short-term descending channel from last week’s bid highs near 0.8760, and the pair easily eased below the 0.8600 zone in Friday trading .

Intraday action has been consistently capped by the 50-hour SMA for most of the week, and a seven-day drop in a row on the daily candles sees EUR/GBP move away from the 200-day SMA in 0.8680.

The 50-day SMA barely had a chance to confirm a bullish crossover of the 200-day SMA before turning back into a bearish stance, and the shorter-term moving average will limit any technical recovery from ten-week lows.

EUR/GBP Hourly Chart

EUR/GBP Daily Chart

EUR/GBP technical levels