EUR/GBP Price Forecast: Sellers retain control below key SMAs
- EUR/GBP trims earlier losses as dip buyers emerge near the 0.8650 region.
- A quiet macro calendar on both sides of the Channel keeps trading subdued.
- The broader technical structure remains bearish, with the pair trading near multi-month lows.
The Euro (EUR) recovers modestly against the British Pound (GBP) on Tuesday, trimming earlier losses after attracting dip-buying interest near the 0.8650 region. At the time of writing, EUR/GBP trades around 0.8664, holding close to multi-month lows amid a thin economic calendar on both sides of the Channel.
From a technical perspective, EUR/GBP remains within a well-defined downward-sloping channel that has guided price action since November 2025, keeping the broader bias tilted to the downside.
The 21-day Simple Moving Average (SMA) has slipped below the 50-day SMA, and both are trending lower, underscoring persistent selling pressure.
On the upside, the 0.8700 psychological level caps immediate recovery attempts. A sustained break above this zone would shift focus toward the upper boundary of the descending channel, which aligns closely with the 21-day SMA. A clear move beyond this confluence would start to weaken the bearish structure and allow for a deeper corrective bounce.
On the downside, a decisive break below the 0.8650 region would strengthen bearish momentum and increase the risk of a continuation toward the 0.8600 handle, a level last seen in August 2025.
Momentum indicators are showing early signs of stabilization. The Moving Average Convergence Divergence (MACD) remains below the signal line and the zero level, but the flattening histogram points to fading downside momentum.
Meanwhile, the Relative Strength Index (RSI) is hovering near 34 after recovering from oversold territory, suggesting scope for near-term consolidation.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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