EUR/GBP Price Forecasts: Euro recovery stalls below 0.8655 in risk-off markets

• The Euro maintains a mild positive tone against the British Pound, but it is failing to break above 0.8655.
• Rising geopolitical tensions and high Oil prices are acting as headwinds for Euro rallies.
• The pair is forming a triangle pattern, with a bearish outcome favoured.

The Euro (EUR) moves higher for the third consecutive day against the British Pound (GBP) on Friday, although bulls are failing to find acceptance above 0.8655. A cautious market mood amid downbeat news from the Middle East is weighing on the Euro across the board, while in the UK, housing price figures have failed to boost the Pound.

The Euro has been weighed down this week by escalating tensions in the Middle East, which have kept Brent Oil prices above $90, adding pressure on Crude-importing Eurozone economies. News reporting that Hezbollah has rejected a ceasefire deal in Lebanon dampens hopes of a swift end to Iran’s war and the reopening of the key Strait of Hormuz, hammering appetite for risk and keeping Euro bulls subdued.

In the UK, Halifax House Price Index data released earlier on Friday showed an unexpected contraction in May, with prices falling 0.1% to confirm the fourth consecutive monthly decline, against expectations of a 0.1% uptick. Year-over-year, housing prices grew at a 0.5% rate, up from April’s 0.4% but half of the 1% market consensus.

Technical Analysis: Forming a triangle pattern

EUR/GBP trades at 0.8650, holding a neutral bias as price consolidates in a sequence of higher lows and lower highs, forming a symmetric triangle. This is considered a continuation pattern and, in that sense, a bearish outcome is favoured.

Momentum indicators in 4-hour charts are mildly positive but show a fading bullish bias. The Relative Strength Index (14) is drifting towards the 50 midline while a marginally positive Moving Average Convergence Divergence (MACD) hints at modest, but not emphatic, upside momentum.

Bulls need to break Thursday's highs at the mentioned 0.8655 resistance area to aim for the triangle top, now around 0.8685, and the May 19 and 29 lows ahead of the 0.8690 area. On the downside, bears are likely to be challenged at the area between the channel bottom, at 0.8635, and Wednesday's low, near 0.8630. Further down, the key support area between 0.8610 and 0.8620 (year-to-date lows) will come into focus.

(The technical analysis of this story was written with the help of an AI tool.)