On Tuesday, the Euro (EUR) lost some of its earlier momentum against the British Pound (GBP), primarily impacted by the rise in oil prices and ongoing worries about France’s economic stability. The EUR/GBP pair is hovering just above 0.8370 after a struggle at the 0.8400 mark on Monday, with the yearly low of 0.8361 lurking nearby.
Investors appear hesitant to make significant moves as they await monetary policy announcements from several prominent central banks this week. The European Central Bank (ECB) is scheduled to meet on Thursday, where it’s expected to maintain current interest rates while signaling potential increases in the months to come, given that inflation remains significantly above target.
Meanwhile, the Bank of England (BoE) is set to convene next week, with investors nearly fully anticipating a 25-basis-point increase, following last week’s positive GDP growth and rising consumer inflation numbers.
ING analysts suggest that “Sterling seems to be benefiting from PM Andy Burnham’s popularity,” and they express skepticism about next week’s UK budget derailing the recent drop of the EUR/GBP below 0.8400. Looking ahead, the analysts believe that “the euro has ample room to decline due to French political factors; EUR/GBP could remain in a range between 0.8360 and 0.8430 for now,” as stated in a recent note from the bank.
Technical Analysis: Bears have lost momentum, but bulls remain absent
The EUR/GBP stands at 0.8375, making slight recoveries just above its year-to-date lows. Momentum indicators on the 4-hour charts indicate a decrease in bearish pressure, with the Relative Strength Index (14) stabilizing around 40 and the Moving Average Convergence Divergence (MACD) inching into positive territory, although bullish momentum is still lacking.
Bulls would need to break through the 0.8400 level (the highs from October 21 and Monday) to trigger a more bullish trend, setting sights on the highs near 0.8430 recorded on October 19 and 20. Should they push higher, a stronger resistance is anticipated in the 0.8480-0.8490 range, coinciding with highs from October 8, 9, and 15.
On the downside, immediate support can be found at the May 2025 low of 0.8355. If that goes, bears may become drawn to the 0.8315 level established in April 2025.
(The technical analysis of this story was created with the assistance of an AI tool. Learn more.)
