EUR/GBP registers weekly lows below 0.8800 and the euro sinks

• The pound is among the most bullish values ​​of the day after the British GDP data, awaiting the CPI figures.
• The sharp EUR/GBP reversal sends price below 0.0800 and below the 20-day SMA.

The EUR/GBP is losing more than 50 points, having the worst day in at least two months. It has recently reached levels below 0.8800 for the first time in a week.

The cross broke below 0.8830 and accelerated the decline. It bottomed out at 0.8792 and remains close to the lows, pressured by the fall of the euro.

Does the ECB see a downward path?

Bloomberg reported that “European Central Bank policymakers are starting to consider a slower pace of interest rate hikes” after a 50 basis point hike in February, “according to officials with knowledge of their discussions.”

Reporting caused the euro to fall across the board, with EUR/USD falling from near 1.0870 to levels below 1.0800. The common currency is the worst performer in the American session.

The pound was already trading higher against the euro, supported by better than expected UK economic data. The unemployment rate is unchanged at 3.7% in November, while median weekly earnings excluding bonuses came in at 6.4% in November, up from 6.1% the month before and 6.3% expected. On Wednesday, the UK will report the Consumer Price Index. The headline index is expected to come in at 10.6% (yoy) in December, up from 10.7% in November.

technical perspectives

EUR/GBP is falling after facing resistance at the 0.8900 level, and with the current bearish acceleration, it could test the next crucial support around 0.8770/75, which is the bottom of the recent range.

Technical indicators are turning lower and could point to further losses if current levels are confirmed. The cross has returned below the 20-day SMA which stands at 0.8820. A recovery above 0.8830 would ease the bearish pressure. A daily close above 0.8900 would open the doors to further gains.

technical levels