Euro slides against the Pound as a UK jobs test looms

The cross hit a two-week low and trades in the 0.8560 region.
Germany ZEW economic sentiment survey is released on Tuesday.
Tuesday's UK labor market report is the near-term catalyst, with the unemployment rate expected to rise.

EUR/GBP slides on Monday, trading around 0.8560 as the Euro (EUR) side of the cross is underpinned by a European Central Bank (ECB) that remains hawkish. The pair hit a two-week low of 0.8554 earlier in the day before the Pound (GBP) gained some ground. ECB President Christine Lagarde spoke in Vienna, but her remarks focused on Europe's dependence on imported artificial intelligence rather than monetary policy, so they carried no signal for rates.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Over the weekend she said the energy shock looks "longer-lasting", with Euro area inflation at 3.3%, well above the 2% target. In a speech on Monday, she turned to a longer-term theme, warning that Europe risks being cut off from artificial intelligence.

The near-term catalyst is the United Kingdom (UK) labor market report due Tuesday. The set is expected to soften. Average earnings, including bonuses, are seen easing to 3.9% from 4.1%, the ILO Unemployment Rate is forecast to tick up to 5% from 4.9%, and the Claimant Count Change is seen swinging back to a rise after the prior fall. Germany's ZEW economic sentiment survey lands the same day and is the Euro's main test of the week.

Short-term technical analysis:

On the 4-hour chart, EUR/GBP trades at 0.8560, keeping a bearish near-term tone as it holds beneath both the 20-period Simple Moving Average (SMA) at 0.8580 and the 100-period SMA at 0.8575. The pair is also capped by nearby horizontal barriers at 0.8562 and 0.8565, while the Relative Strength Index (RSI) slipping toward the 30 area around 30.15 hints at waning momentum that could allow further downside before any meaningful recovery attempt.

On the downside, immediate support is aligned at 0.8556 and 0.8555, forming a tight floor that buyers may attempt to defend. On the topside, a first recovery hurdle appears at 0.8562, followed by 0.8565, ahead of the 100-period SMA at 0.8575 and the 20-period SMA at 0.8580, and only a sustained break above this clustered resistance zone would ease the current bearish pressure.

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