Why has the Euro fallen to 19-month lows of 0.8336 against the British Pound despite upbeat Eurozone GDP?

• EUR/GBP slides to new 19-month lows below 0.8340, heading for a 3.15% decline over a five-week downtrend.
• Euro bulls remain constrained by rising unemployment and elevated Oil prices, despite Eurozone GDP exceeding Q3 forecasts.
• Expectations of a BoE rate hike next week continue to support demand for the Pound.

Selling pressure on the Euro (EUR) persists on Friday, while the British Pound (GBP) advances broadly as markets factor in a Bank of England (BoE) rate hike next week. Eurozone macroeconomic releases have done little to reassure investors. After touching a fresh 19-month low of 0.8336, EUR/GBP is heading for a 3.15% decline over a five-week downtrend.

At 0.4%, third-quarter growth in the Eurozone’s Gross Domestic Product (GDP) was double the expected 0.2%, preliminary Eurostat figures showed. However, the pace slowed from 0.6% in the preceding quarter. Earlier GDP releases showed Germany outperforming expectations, whereas France’s economy shrank despite the market consensus pointing to modest growth.

An unexpected rise in unemployment has tempered investor optimism over the Eurozone’s positive growth figures. September’s Unemployment Rate edged up to 6.5%, against market expectations of 6.4%.

Adding to the pressure on regional economic growth, Oil prices are holding close to five-month highs. With Brent Crude steady above $112.00 a barrel, inflation risks are also rising.

Attention in the UK has turned to next week’s Bank of England meeting. With recent macroeconomic releases indicating continued economic growth and inflation still well above the bank’s target, futures markets have almost fully priced in a 25-basis-points rate increase next week.

Technical Analysis: Is EUR/GBP Approaching Oversold Territory?

A bearish near-term outlook remains in place for EUR/GBP, which is trading at 0.8343 at the time of writing as its decline continues within a descending parallel channel. On the 4-hour chart, momentum indicators reinforce that outlook. However, the Relative Strength Index (14), near 32, is approaching oversold territory, suggesting that sellers may need to pause.

A confirmed break below Thursday’s low of 0.8345 would bring the late March 2025 lows in the 0.8315 to 0.8330 range into focus. Beyond these lies the channel’s lower boundary, currently around 0.8300.

Any recovery is likely to face resistance at the channel’s upper boundary of 0.8360. Further hurdles lie at Wednesday’s high near 0.8385 and the weekly high just above 0.8400.

(The technical analysis of this story was written with the help of an AI tool. Know more.)