EUR/GBP Price Forecast: 100-day SMA blocks recovery as momentum remains subdued

• EUR/GBP edges higher as the British Pound remains under pressure on UK fiscal concerns and a less hawkish BoE outlook.
• Technically, the cross remains trapped between the 50-day and 100-day SMAs, keeping the near-term bias broadly neutral.
• Momentum indicators show that neither buyers nor sellers are in clear control.

EUR/GBP edges higher on Tuesday as the British Pound (GBP) remains under pressure across the board, weighed by concerns over the UK’s deteriorating fiscal outlook and the Bank of England’s (BoE) reluctance to raise interest rates while several major central banks have moved toward tighter policy. The cross, however, remains confined to a narrow range, trapped between the 50-day and 100-day Simple Moving Averages (SMAs), keeping the technical bias broadly neutral. At the time of writing, EUR/GBP trades around 0.8580.

Pound stays heavy as tighter UK fiscal stance threatens dovish BoE repricing

Strategists at Brown Brothers Harriman note that the UK’s fiscal backdrop is turning more restrictive. They point out that “the UK government borrowed £18.3bn in August, up £2.9bn from August 2025 and £3.5 billion above the Office for Budget Responsibility forecast,” a dynamic that has sharply eroded fiscal space. BBH adds that “higher borrowing costs are estimated to have halved the government’s fiscal headroom to around £12bn,” leaving Chancellor John Healey under mounting pressure “to raise taxes and cut spending to deliver his promised ‘buffer against uncertainty’ in the October 28 Autumn Budget.”

In BBH’s view, the “bottom line” is that “a tighter UK fiscal squeeze suggests the BoE may not need to raise the policy rate as much as markets expect (100bps in the next twelve months to 4.75%).” As a result, they warn that “GBP is vulnerable to a dovish BoE repricing.”

Technical analysis

On the daily chart, EUR/GBP keeps a capped tone as it holds beneath the 100-day simple moving average (SMA) at 0.8593 and the 200-day SMA clustered with the 78.6% Fibonacci retracement at 0.8641. The pair is marginally above the 50-day SMA at 0.8559 and the 50.0% retracement at 0.8578, but these nearby supports have yet to trigger a decisive rebound.

The Relative Strength Index (14) around 53 hints at mildly positive momentum, while the Moving Average Convergence Divergence (MACD) is fractionally below zero with a flat profile, and a low Average Directional Index (ADX) near 14 together suggest a weak, directionless market still biased lower while price remains under the key medium-term averages.

On the topside, initial resistance comes at the 100-day SMA around 0.8593, followed by the 61.8% Fibonacci retracement at 0.8604, before a more significant barrier emerges at the dense 0.8641 zone where the 200-day SMA and 78.6% retracement converge; beyond that, the cycle high at the 100.0% level of 0.8689 marks a broader upside cap.

On the downside, immediate support is seen just under the market at the 50.0% retracement near 0.8578, with the 50-day SMA at 0.8559 and the 38.2% retracement at 0.8551 forming a secondary demand band; a deeper slide would expose the 23.6% level at 0.8519 and the structural anchor around 0.8466.

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