- The EUR/GBP is falling in Monday trading, stepping away from the 0.8700 handle.
- The ECB's Lagarde sees further weakness in the European economy.
- Analysts expect the EUR/GBP to gain ground heading into the end of the year on UK headwinds.
The EUR/GBP is losing ground on Monday, with the Euro slipping following dovish comments from the European Central Bank's (ECB) President Christine Lagarde.
Lagarde: further weakness in third quarter
ECB President Lagarde noted that there has been an overall slowdown in momentum for the EU economy, and job creation continues to moderate.
The ECB sees further weakness for the third quarter, and the EU's central bank has also delayed the completion of its policy framework review, which has been pushed out to sometime by the spring of 2024.
Despite Monday's backslide, the Euro (EUR) continues to trade well against the Pound Sterling (GBP) overall looking longer-term. The EUR/GBP managed to swing into a fresh four-month high before falling back to 0.8670.
Analysts at Danske Bank expect the trend to continue, with the EUR/GBP forecast to hit 0.8800 by the end of the year, citing greater headwinds for the Pound Sterling thanks to a dovish Bank of England (BoE).
The economic calendar is notably thin for both the Euro and the Pound Sterling for the first half of the trading week with very little on the data docket.
Euro traders will be making note of the ECB's monthly bulletin due on Thursday, while Friday brings UK Gross Domestic Product (GDP) and EU Consumer Price Index (CPI) figures.
Market forecasts see the annualized GDP growth rate for the UK holding steady in the 2nd quarter at 0.4%.
On the EU CPI side, median estimates expect the harmonized CPI index to lag slightly, forecast to print at an annualized 4.8% for the month of September.
EUR/GBP technical outlook
The EUR/GBP slipped in Monday trading to test the 0.8670 region, and intraday technical support currently sits at the 100-hour Simple Moving Average (SMA) near 0.8660, with a rising trendline marked into hourly candles from last week's swing low into 0.8610.
Daily candlesticks see the Euro-Pound pair trading back from the 200-day SMA that currently sits just beneath 0.8720, and failure to capture fresh bullish territory from here will see the pair set to re-challenge near-term swing lows between 0.8580 and 0.8520.
EUR/GBP daily chart
EUR/GBP technical levels
|Today last price||0.8671|
|Today Daily Change||-0.0025|
|Today Daily Change %||-0.29|
|Today daily open||0.8696|
|Previous Daily High||0.87|
|Previous Daily Low||0.866|
|Previous Weekly High||0.87|
|Previous Weekly Low||0.8599|
|Previous Monthly High||0.8669|
|Previous Monthly Low||0.8493|
|Daily Fibonacci 38.2%||0.8685|
|Daily Fibonacci 61.8%||0.8676|
|Daily Pivot Point S1||0.8671|
|Daily Pivot Point S2||0.8646|
|Daily Pivot Point S3||0.8631|
|Daily Pivot Point R1||0.8711|
|Daily Pivot Point R2||0.8726|
|Daily Pivot Point R3||0.8751|