The Euro (EUR) is holding steady against the British Pound (GBP) this week, supported by lower oil prices, though the broader trend remains capped. The EUR/GBP pair has found support above 0.8350 after bouncing from lows of 0.8320 last week, but upside attempts have been limited below 0.8370 so far. The decline in oil prices, with Brent Oil dropping about 20% from last week's highs and hovering just above $90, has provided some relief to Eurozone economies.
On the macroeconomic front, the UK's Gross Domestic Product (GDP) met expectations with a 0.7% growth in the third quarter and a 1.9% yearly advance. Industrial Production and services’ output grew beyond expectations, but the impact on the Pound has been muted. In the Euro Area, the economic calendar is light on Thursday, with European Central Bank (ECB) President Christine Lagarde scheduled to speak at an economic event in Paris during the late US session. Lagarde is not expected to alter market expectations of a 25 basis points interest rate hike at the ECB's next meeting on December 17.
Technical analysis shows EUR/GBP trading at 0.8358, holding a broadly neutral immediate tone. The broader bearish trend remains intact after a more than 3% plunge in October. Momentum indicators on 4-hour charts are mixed, with the Relative Strength Index (14) above the 50 midline and the Moving Average Convergence Divergence (MACD) slipping into negative territory. Bulls would need to break Wednesday's high at 0.8370 and the October 28 high around 0.8380 to expose the October 26 high in the 0.8400 area. To the downside, a bearish reaction below Wednesday's low at 0.8350 brings the November 6 and 9 lows, near 0.8335, back into focus.