EUR/GBP at the edge of a bearish trend reversal

EURGBP is posting its second consecutive negative week as the UK’s energy reliance fuels fears of renewed inflation, while the euro faces geopolitical headwinds amid the Middle East crisis.

The pair has returned to February’s support region around 0.8620, where the 38.2% Fibonacci retracement of the 2025 uptrend lies. A break below this zone could signal a bearish trend reversal, especially if the tentative support line at 0.8590 gives way. In that case, the sell-off could accelerate towards the 50% Fibonacci level at 0.8540 or the psychological 0.8500 mark. If downside pressure persists, the 61.8% Fibonacci level near 0.8470 could be the next destination.

Meanwhile, a death cross between the 50- and 200-day simple moving averages (SMAs) is currently forming for the first time since January 2024, highlighting the risk of broader trend deterioration. The momentum indicators also remain tilted to the downside, limiting prospects for a meaningful rebound. Still, a recovery attempt cannot be ruled out because the stochastic oscillator and the RSI are hovering near oversold territory, suggesting the bearish momentum may start to ease.

On the upside, if the pair stabilizes near 0.8620, it could push towards the SMAs and the 0.8700-0.8715 zone. Moving higher, the price may next target the key resistance trendline near 0.8770. Breaking this level would eliminate fears of a bearish trend reversal, shifting the focus back to the 2025 peak of 0.8864.

In a nutshell, EURGBP is at risk of a bearish breakout. However, since the pair is trading near a critical support zone, sellers may need confirmation below 0.8590 before gaining stronger control.