Euro Remains on the Defensive against the Pound

The euro currency remains on the defensive against the British pound. The headline EUR/GBP currency exchange rate is trading lower and near 0.8430 headed into Wednesday trade session. Forex traders are waiting on inflation numbers. The shared currency is also weaker thanks to dovish European Central Bank commentary from overnight.

Today’s economic calendar picks up with inflation numbers. The European Union will publish monthly headline and core consumer price index (CPI) numbers. Their largest economy, Germany is also releasing their monthly consumer price index. The United Kingdom is getting in on the act with their consumer price index data, as well.

Euro currency traders paid close attention to yesterday’s commentary from European Central Bank (ECB). European Central Bank President Christine Lagarde spoke. Ms. Lagarde said that the central bank will continue to aid the Eurozone economy as the Covid-19 virus is still having an impact.

Also giving remarks, overnight, was ECB Governing Council member and Bank of France Governor Francois Villeroy. He is not sure the ECB will begin raising rates by end of 2022. He feels inflation will subside and fall back to the bank’s target of two percent.

Daily Euro Currency Technical Analysis

Looking at the above daily MT 4 price chart, the technical indicators look flat. The euro currency is also still trading within a two week old falling trend channel. Also of note, the momentum indicator looks negative which could mean more losses ahead for the EUR/GBP Forex market.

While the technical indicators look indecisive, a challenge of 0.84 could happen. A daily close below 0.84 opens the door to challenge the 2020 low price level in play at 0.8280.

On the upside a daily close above the descending price channel around 0.8455 could bring the buyers back into this Forex market. The 200 day simple moving average lines up near the round number of 0.85 before bringing 0.8535 into focus next.