The common currency sell-off intensified after Draghi highlighted the increasing downside risks for the regional economy. Moreover, ECB’s Vasiliauskas said today that the forecasts will be revised in March while the balance of risks has a ‘negative outlook’. Meanwhile, the ECB released the results of its latest survey of professional forecasters that sees slower growth and projections. In particular, 2019 GDP growth is now seen at 1.5% versus the previous estimate of 1.8%. All the comments and numbers confirm that a rate hike this year is getting more unlikely, which will continue to press the euro lower.
Considering the rising chances of a ‘soft’ Brexit, the near-to-medium outlook for EURGBP remains . So despite the oversold conditions the cross will likely resume the downtrend after a pause. An important technical break below the immediate support at 0.86 could attract more sellers and open the way towards 0.85.