EUR/GBP grinds near nine-month low around 0.8550 as UK jobs, ECB eyed

• EUR/GBP licks its wounds at the lowest levels since August 2022, recently bouncing off multi-day low.
• Mixed concerns about UK’s growth recently triggered pair’s rebound but ECB vs. BoE bias keeps sellers hopeful.
• British employment, BoE Quarterly Bulletin can entertain traders.
• Major attention will be on how ECB manages to tame inflation amid recession woes.

EUR/GBP remains on the back foot at the lowest level since August 2022, despite recently paring intraday losses near 0.8545 heading into Monday’s London open. In doing so, the cross-currency pair justifies comparatively downbeat economic concerns about the Eurozone more than the UK. However, the cautious mood ahead of this week’s top-tier UK data and the European Central Bank (ECB) Monetary Policy Meeting allows bears to take a breather.

Earlier in the day, Bank of England (BoE) policymaker Catherine Mann said the UK government needs long-term agenda to defend the growth prospects. However, the UK’s Confederation of British Industry (CBI) trade body said on Monday that Britain's economy now looks likely to sidestep recession entirely this year but deep-rooted problems like weak business investment will persist.

On a different page, growth numbers from the Eurozone and Germany, as well as final readings of the inflation catalysts, haven’t been impressive to justify the ECB policymakers’ hawkish bias. That said, concerns about the economic slowdown in the old continent unearth after the recently downbeat statistics, which in turn suggests that the ECB might not be able to increase the rates past this week’s 0.25% rate hike.

Alternatively, the UK’s inflation problems are way more complex and the price pressure is too high in London than in Brussels, which in turn pushes the ECB versus BoE divergence in favor of the EUR/GBP bears.

Looking ahead, there prevails no major data/event on Monday and hence the EUR/GBP may remain depressed near the multi-month low. However, Tuesday’s UK employment data will be important for the pair watchers ahead of Thursday’s ECB decision. While the upbeat UK jobs report may allow the pair sellers to remain happy, any surprises need validation from the ECB to recall the bulls.

Technical analysis

Although the oversold RSI (14) line challenges EUR/GBP bears, the pair’s recovery needs validation from the short-term falling wedge bullish chart formation’s top line, currently around 0.8595.