Euro slides to 19-month lows against British Pound at 0.8336 despite positive Eurozone GDP data

• EUR/GBP falls to new 19-month lows beneath 0.8340, heading for a 3.15% decline over a five-week downward trend.
• Stronger-than-expected Q3 Eurozone GDP fails to lift Euro bulls as rising unemployment and elevated oil prices limit gains.
• Expectations of a BoE rate rise next week continue to underpin the Pound.

Eurozone macroeconomic figures have offered investors little reassurance on Friday, leaving the Euro (EUR) under further pressure. By contrast, expectations of a Bank of England (BoE) rate rise next week are driving broad-based gains in the British Pound (GBP). After reaching a new 19-month low of 0.8336, EUR/GBP is heading for a 3.15% decline over a five-week downward trend.

At 0.4%, third-quarter growth in the Eurozone’s Gross Domestic Product (GDP) was double the expected 0.2%, according to preliminary Eurostat figures, although it slowed from 0.6% in the preceding quarter. Earlier releases showed German GDP exceeding forecasts too, whereas the French economy shrank despite market expectations of a modest expansion.

An unexpected rise in the unemployment rate tempered investors’ optimism over the Eurozone’s positive growth. September’s reading edged up to 6.5%, compared with the 6.4% anticipated by the market.

Meanwhile, oil continues to trade close to five-month highs. With Brent Crude holding above $112.00 a barrel, elevated prices are weighing significantly on the region’s economic growth and adding to inflation risks.

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

Technical Analysis: EUR/GBP slides towards oversold territory

A descending parallel channel continues to guide EUR/GBP lower, with the pair trading at 0.8343 at the time of writing and its near-term outlook remaining bearish. Although momentum indicators on the 4-hour chart support further weakness, the Relative Strength Index (14) is close to 32 and approaching oversold territory, suggesting sellers may need to pause.

A confirmed break beneath Thursday’s low of 0.8345 would bring the late March 2025 lows, between 0.8315 and 0.8330, into view. Beyond these lies the channel’s lower boundary, currently around 0.8300.

Any recovery is likely to face an initial test at the channel’s upper boundary of 0.8360. Further resistance lies at Wednesday’s high near 0.8385, followed by the weekly high just above 0.8400.

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