Euro Rate Today: EUR Forecasts vs Pound and Dollar Ahead of the Crunch ECB Event

Nevertheless, we remain wary that recovery could merely be a bout of profit-taking as there are some significant risks lying ahead in what promises to be a crunch month for the shared currency.

The euro is still just off its worst levels against the British pound (GBP) since September 2012, we are also seeing similar time-frame lows against the US dollar.

Today's euro rates, (04/09):

• The euro to pound exchange rate (EUR/GBP) is 0.04 pct lower on a day-to-day basis and converts at 0.7987.
• The euro to dollar exchange rate (EUR/USD) is 0.09 pct lower and the conversion is at 1.3138.
• The euro to Canadian dollar rate (EUR/CAD) is 0.11 pct higher and the conversion is at 1.4336.

Be aware: All quotes here are mid-market in nature; your bank will affix a spread at their own discretion when passing on currency. However, an independent FX provider will guarantee to undercut your bank's offer, in some cases delivering up to 5% more FX.

Could EUR/USD Fall Down Towards 1.3?

Despite some recent relief for the shared currency, analyst Bill McNamara at Charles Stanley confirms to us that the outlook is certainly one that favours the dollar over the euro in the long-term.

In a forecast note to clients McNamara says:

"The single currency fell sharply against the dollar for the second month in a row (the first time it has posted two consecutive monthly declines in 14 months) and its 1.9% decline has taken it to its lowest reading since July 2013.

"The long-term uptrend has been breached in a decisive manner and although this leaves the euro looking extremely oversold – its 14-week RSI has slumped to a three-and-a-half year low of 27% - there is still little in the broader technical picture to suggest that it has reached a bottom yet. In fact, the next area of possible support is now at 1.30 or so."

Swissquote Research tell us they are also forecasting weakness:

"EUR sentiment remains comfortably bearish. The next key support stands at 1.3105 (6th Sep 2013 low). The option related offers should back up the EUR weakness through this week. Solid barriers abound pre-1.3200. The key support stands at 0.78743 (July 23th low). The ECB gives verdict on Thursday and we do not expect any surprise."

Friday saw the euro fall further against its US counterpart, marking the seventh consecutive week of decline – the longest run in over a decade.

"Inflation and unemployment figures released on Friday morning came in as widely forecast, but it seemed that the forecast had not been fully priced into the market as we saw the currency hit fresh year-long lows against the US dollar. The euro held fairly steady against sterling, however, before dropping off to three-week lows on Friday afternoon," says Carl Hasty at Smart Currency Business.

Euro to Pound Exchange Rate Forecast: Staying Negative on EUR/GBP

Turning to the euro sterling rate, we note analysts at KBC Markets are staying negative on the currency.

In August, sterling fell prey to profit taking, as the UK data turned a bit mixed.

Especially ongoing low wage growth helped BoE’s Carney to fend off calls for early rate action.

Piet Lammens at KBC Markets reckons:

"At the same time, the BoE minutes showed that two members voted for a rate hike in August. EUR/GBP settled in a 0.7875/0.8035 consolidation range.

"EUR/GBP touched a correction top in the 0.8035 area mid-August, but global euro weakness prevented a further rise. This area is now a new strong resistance for the EUR/GBP cross rate. We reinstalled a sell-on-upticks approach. The 2014 low (0.7874) is the first important support. We maintain our LT bearish view on the euro with EUR/GBP 0.7755 as a target."

The Agenda This Week

Looking forward to this week there are a number of releases of note, but the key event will be the European Central Bank (ECB) meeting on Thursday and the central bank press conference which follows.

"Most forecast that interest rates will be held at the current record low of 0.15%, with a handful of analysts suggesting we may see further cuts. However, the key item will be to find out what measures the ECB will be taking with regard to some form of quantitative easing as they try to bolster the Eurozone economy. All eyes will be on the press conference following the meeting for clarity on what the ECB is going to do," says Hasty.