EUR/GBP near 9-month lows around 0.8550 before UK employment and ECB

• EUR/GBP licks its wounds at the lowest levels since August 2022.
• Mixed concerns about UK growth have triggered a rebound in the pair, but the ECB’s bias against the BoE keeps sellers hopeful.
• UK Employment and the BoE Quarterly Bulletin can entertain traders.
• The focus will be on how the ECB manages to control inflation amid the troubles of a recession.

He EUR/GBP keep going back and situate at its lowest level since August 2022, despite paring intraday losses near 0.8545 before the European open on Monday. Thus, the currency pair justifies the more pessimistic economic concerns about the eurozone than about the UK. However, caution ahead of this week’s important UK data and the European Central Bank (ECB) monetary policy meeting allows bears to take a breather.

Earlier in the day, the head of economic policy at the Bank of England (BoE), Catherine Mann, stated that the British government needs a long-term agenda to defend growth prospects. However, the Confederation of British Industries (CBI) has stated on Monday that it seems likely that the UK economy will completely avoid recession this yearbut that fundamental problems will persist, such as the weakness of business investment.

On the other hand, growth figures for the Eurozone and Germanyas well as the final readings of the inflation catalysts, they have not been impressive enough to justify the hawkish bias of ECB policymakers. That said, concerns about an economic slowdown in the Old Continent are surfacing on the back of the recently bearish statistics, which in turn suggests that the ECB may not be able to raise rates beyond this week’s 0.25% rate hike. .

Besides, UK inflation problems are much more complex and price pressure is higher in London than in Brusselswhich in turn pushes the divergence between the ECB and the Bank of England in favor of the EUR/GBP bears.

There will be no data or major events on Monday, so EUR/GBP could remain under pressure near the multi-month low. However, the UK jobs data on Tuesday will be important for traders of the pair before the ECB decision on Thursday. While the UK jobs report may allow sellers of the pair to remain happy, any surprises need ECB validation.

EUR/GBP Technical Analysis

Although the oversold line of the RSI (14) challenges EUR/GBP bears, a recovery for the pair needs validation from the upper line of the short-term bullish falling wedge formation, currently around 0.8595.