EUR\/GBP fell below 0.8700 on Monday after failing near 0.8720, and moved towards 0.8685 at the bottom of last week\u2019s range. The broader downtrend channel resistance is near 0.8720.<\/p>\n
The pair declined 0.3% on Friday despite an upward revision to the Eurozone GDP second estimate. Eurozone Industrial Production data due on Monday is expected to show a 1.5% fall in December, after a 0.7% rise in November.<\/p>\n
The UK economic calendar is empty on Monday. Attention turns to Tuesday\u2019s UK employment report, which may affect expectations for the Bank of England\u2019s next policy steps.<\/p>\n
On the daily chart, EUR\/GBP traded around 0.8695 after being rejected by trendline resistance, with the rebound from early February lows fading. MACD shows a shrinking positive histogram, while RSI is just above 50.<\/p>\n
The pair has fallen for four straight days and is near support above 0.8675, the 6 February low. A break below that level could open the way to 0.8612, the 4 February low.<\/p>\n
Looking back to this time in 2025, we saw the EUR\/GBP pair struggle below the 0.8700 level as bearish momentum was building. Concerns over weak Eurozone industrial data were a key factor, putting pressure on the Euro. This created a clear downtrend channel that traders were closely watching.<\/p>\n
The situation today, in February 2026, presents a different economic picture for the Eurozone. Recent flash estimates from Eurostat show that core inflation has remained surprisingly sticky, hovering around 2.9% last month, which is keeping the European Central Bank from signaling any rate cuts. This contrasts with the sluggish factory output data from last year and provides underlying support for the Euro.<\/p>\n
In the UK, the narrative has shifted towards a cooling economy, with wage growth recently slowing to 5.6% in the latest ONS report, down from over 7% in mid-2025. This, combined with UK inflation falling faster than expected to 3.4% in January 2026, increases the probability that the Bank of England will cut rates before the ECB. This divergence in monetary policy expectations is a significant change from the sentiment we saw last year.<\/p>\n
Given this evolving fundamental backdrop, traders could consider positioning for a potential reversal of the old downtrend. Buying EUR\/GBP call options with a strike price around 0.8750 expiring in the next six to eight weeks could capture a move higher if the economic data continues to diverge. This strategy offers a defined risk on a view that the Euro may strengthen against the Pound.<\/p>\n
To manage the risk of this outlook being wrong, we could also look at a strategy to hedge against a sharp drop. Purchasing out-of-the-money put options, perhaps with a 0.8600 strike, provides a floor in case UK data surprises to the upside or sentiment shifts unexpectedly. This helps protect the downside while maintaining exposure to a potential rally in the pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/GBP slips below 0.8700, eyes 0.8685 support; traders await Eurozone output data and UK jobs report.<\/p>\n","protected":false},"author":62,"featured_media":17031,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41972"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17031"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}