• The EUR/GBP is moderately up on Monday, climbing 0.2%.
• The Euro is catching a breather after two weeks of accelerated declines against the Pound Sterling.
• A dovish ECB is doing the Euro few favors, midweek to bring EU Retail Sales figures.

The EUR/GBP is seeing a welcome break from ongoing Euro (EUR) selling, rebounding a modest two-tenths of a percent against the Pound Sterling (GBP) on Monday.

The EUR/GBP remains mostly flat on the day, with the majority of the pair’s gains coming at the very start of the new trading week’s opening session, but any news is good news for the Euro which has seen two weeks of rapid declines against the Pound Sterling.

Monday saw the Eurozone’s December Sentix Investor Confidence Index recover less than investors expected, with indexed investor outlook printing -16.8, down from the forecast -14.4, but still an improvement from November’s Sentix Investor Confidence read of -18.6.

ECB talking points, EU Retail Sales to drive the Euro-Pound Sterling pair 

The European Central Bank (ECB) has settled into a repetitive speech cycle recently, noting that inflation continues to decline within the Eurozone, and markets have seen a discount applied to the Euro as investors remain skeptical that the ECB will be able to achieve a desirable rate of price growth within a reasonable timeframe, with the ECB hoping for inflation to cool to 2% sooner rather than later.

Wednesday will see October’s Eurozone Retail Sales, and the annualized headline is expected to come in at -0.9% compared to September’s -2.9%. The MoM figure for October is forecast to see a slight improvement from -0.3% to 0.2%.

EUR/GBP Technical Outlook

Monday represents the Euro's next chance to try and reverse recent declines, with EUR bidders looking to kick off a fresh bullish rally after the new week's early rebound from 0.8560.

The EUR/GBP has closed in the red for nine of the last ten trading sessions, shedding two and a third percent peak-to-trough since retreating from November's high bids of 0.8765, slipping cleanly through the 200-day Simple Moving Average (SMA).

The long-term moving average and the 50-day SMA are consolidating around 0.8680 and set to act as a magnet for medium-term price action rather than a hard limit.

EUR/GBP Hourly Chart

EUR/GBP Daily Chart

EUR/GBP Technical Levels