EUR/GBP tumbles to three-week lows after ECB

• Euro slide versus CHF and GBP after ECB meeting.
• EUR/GBP head for lowest close since mid-August.

The EUR/GBP dropped further following the European Central Bank (ECB) meeting and Lagarde’s press conference. The cross bottomed at 0.8523, reaching the lowest level since August 19. Key UK economic data will be released on Friday.

Euro down after ECB

As expected, the ECB kept interest rates unchanged and slowed down its Pandemic Emergency Purchase Program in the fourth quarter. “This slowdown was widely expected and probably as close to the market consensus as there could be. The entire press conference unfolded in a quite predictable fashion”, said analysts at Danske Bank.

The euro weakened after the ECB meeting, falling particularly versus the Swiss franc and the pound. The decline in EUR/GBP was even stronger due to technical factors. The cross broke an uptrend line and relevant horizontal support levels. It even dropped below the 20-day moving average for the first time in a month.

From the daily low it rebounded and rose toward 0.8540. The immediate support stands at 0.8530 followed by the 0.8500 zone. On the upside, now resistance levels might be located at 0.8560.

Technical levels