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Despite poor data, a Bank of England interest rate cut and a poorly received budget, pound sterling is rising against the euro.
The pound to euro exchange rate (GBP/EUR) has been ascendant since mid-November, and this Week Ahead Forecast looks for that uptrend to hold court in the coming days.
The new week starts with some sobering economic data that reveals the economy grew just 0.1% in the third quarter of the year, confirming it has all but stalled.
Yet, GBP/EUR rises to 1.1432 on Monday.
The gains simply tell us that the pound has absorbed a good dose of bad news already, having fallen against the euro steadily through the course of 2025.
With much of the bad news 'in the price', a relief bounce has been in place since the middle of November, when the pair printed its yearly low of 1.1285.
The daily chart shows a trend of higher 'lows' in each of the downcycles of the post-November recovery:
The exchange rate sits above its 21-day exponential moving average (at 1.14), which we see as confirmation of positive interday momentum.
We're also just above the 50-day EMA here, which is also a signal of improving momentum over the multi-week timeframe. (Note, however, that a break above the 50-day earlier this month wasn't sustained, which was a disappointment for the bulls).
Given the constructive technical setup, the immediate objective for the pair is the 1.1465 high reached on December 09.
With the data and news calendar likely to dry, and momentum taking hold in markets, we think a rise to 1.1465 is a reasonable objective for the final run into year-end.