EUR/GBP Hits Two-Week Low as ECB Hawkishness and UK Jobs Report Loom

The Euro (EUR) has continued its decline against the Pound (GBP), trading at around 0.8560 as the European Central Bank (ECB) maintains a hawkish stance. ECB President Christine Lagarde's remarks in Vienna focused on Europe's dependence on imported artificial intelligence, rather than monetary policy, offering no signal for interest rates.

Lagarde did express concerns about the energy shock being 'longer-lasting', with Euro area inflation at 3.3%, significantly above the 2% target. The near-term catalyst is the UK labor market report due on Tuesday, which is expected to show a softer employment picture. Average earnings, including bonuses, are forecast to ease to 3.9% from 4.1%, and the ILO Unemployment Rate is seen ticking up to 5% from 4.9%.

The Euro's main test of the week will be Germany's ZEW economic sentiment survey, which lands on Tuesday. Short-term technical analysis suggests a bearish tone for EUR/GBP as it holds below both the 20-period Simple Moving Average (SMA) and the 100-period SMA. The Relative Strength Index (RSI) is slipping toward the 30 area, hinting at waning momentum.