EUR/GBP Forecast and News
EUR/GBP slips toward 0.8550 at the time of writing on Tuesday, with the Euro (EUR) unable to hold onto earlier gains against the Pound Sterling (GBP). The pullback comes even after a soft United Kingdom (UK) labor report and a stronger-than-expected German sentiment survey, a mix that would normally favor the single currency.
Technical Analysis
In the 4-hour chart, EUR/GBP trades at 0.8551, keeping a capped tone as it holds just under a dense band of overhead levels. Price sits above the 20-period Simple Moving Average (SMA) at 0.8549, which offers immediate trend support but remains below the 100-period SMA at 0.8558 and nearby horizontal barriers at 0.8553 and 0.8559, limiting upside attempts. The Relative Strength Index (14) around 51 suggests neutral-to-slightly positive momentum, yet this is not strong enough to outweigh the prevailing resistance cluster overhead.
On the topside, initial resistance appears at the horizontal level of 0.8553, ahead of the 100-period SMA and accompanying resistance line at 0.8558, with a break higher exposing 0.8559 as the next hurdle.
On the downside, the immediate pivot is the horizontal support at 0.8551, with the 20-period SMA at 0.8549 following as the next layer of demand; a sustained move below this short-term average would open the door to a deeper pullback within the recent range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
| Time | Event | Impact | Actual | Consensus | Previous |
|---|
The German ZEW Economic Sentiment index rose to 34.2 in August, beating the 30.0 forecast and July’s 26.3 reading, while the Eurozone gauge also improved more than expected. The release drew little reaction in EUR/USD, and it has done little to keep EUR/GBP bid.
The Pound, for its part, had come under pressure earlier after the UK labor report for the three months to June. The ILO Unemployment Rate held at 4.9%, above the 4.8% forecast, while employment growth slowed. Analysts at ING said the figures were nothing earth-shattering but still point to a cooling jobs market with minimal wage pressure, leaving in their view “little impetus for the Bank of England (BoE) to hike rates this year.” Even so, Sterling has steadied through the European session, and the cross is drifting lower.
The next test comes on Wednesday with UK Consumer Price Index (CPI) data for July. Consensus is 2.9% YoY, up from 2.6% previously. A hot print would revive BoE hike bets and add to the pressure on EUR/GBP, while a soft one would leave the Pound exposed and could give the Euro room to recover.
About EUR/GBP
The EUR/GBP pair reflects how many British Pounds (GBP) are needed to purchase one Euro (EUR). As both currencies are considered high-yielding assets, the pair usually has limited daily volatility. Significant movements are usually triggered by major events such as central bank monetary policy announcements or political disruption.
Related pairs
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used to describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of the Euro Dollar pair stems from its representation of two of the world's largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps .
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume . This activity slows around midday during the European lunch break but picks up again when US markets come online.
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as 'the Cable', a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
INFLUENTIAL INSTITUTIONS AND PEOPLE FOR THE EUR/GBP
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB's mandate is to maintain price stability in the Eurozone, so that the Euro's (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank's work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
ECB official website, on X and YouTube
The Bank of England (BoE)
The Bank of England (BoE) is the central bank of the United Kingdom (UK). Known as 'The old lady of Threadneedle Street', is responsible for maintaining the UK's economic stability. It operates monetary policy by adjusting the Bank Rate and, in certain circumstances, supplements this with measures such as quantitative easing. Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028.
BoE official website, on X and Facebook
Christine Lagarde
Christine Lagarde became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Lagarde on ECB's profile and Wikipedia
Andrew Bailey
Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028. Previously, he served in the BoJ as its Chief Cashier, Deputy Governor for Prudential Regulation and Chief Executive of the Financial Conduct Authority.
Bailey on BoE's profile and Wikipedia