EUR/GBP Price Forecast: Reaching oversold levels at six-week lows sub-0.8550
- EUR/GBP accelerates its downtrend and hits fresh six-week lows at 0.8540.
- The upward revision of UK GDP adds to the case for a BoE interest rate hike.
- The pair has broken the bottom of the ascending channel from late July.
The Euro (EUR) is dropping sharply against the British Pound (GBP) on Wednesday, as UK data has endorsed recent claims by Bank of England (BoE) officials to hike interest rates, while German data disappointed on Wednesday. The EUR/GBP chart falls 0.3% on the day, reaching six-week lows at 0.8540 so far, with intra-day charts showing oversold levels.
Final UK Gross Domestic Product (GDP) data released on Wednesday revealed that the economy grew at a 0.5% pace in the second quarter, and 1.4% from the same period last year, above the 0.4% and 1.2% readings released in previous estimates. Beyond that, the Current Account deficit narrowed to GBP 19.932 billion in Q2 from a downwardly revised GBP 21.12 billion in Q1, against market expectations of a GBP 25.6 billion shortfall.
In the Eurozone, data from Germany disappointed, as Retail Sales contracted 0.4% in August, following a 2.5% fall in July, while the Unemployment rate remained steady at 6.4%, although the Unemployment Change rose more than twice the market consensus.
Technical Analysis: The channel's break puts bears in control
EUR/GBP trades at 0.8546, showing a strong bearish tone after plunging 0.6% so far this week and breaking the bottom of the ascending channel. Intraday momentum indicators, however, show deeply oversold levels, as the 4-hour Relative Strength Index (14) stands near 25, highlighting the stretched downward trend, while the Moving Average Convergence Divergence (MACD) indicator remains negative.
These levels suggest the posibility of a corrective bounce, which is expected to face significant resistance at the confluence of the broken trendline, the 0.8560 area, and the September 17 and 28 lows near 0.8560. Further up, the September 29 high, at 0.8585, will come into focus.
With the RSI at the current levels, the pair seems unlikely to extend lows below the 0.8530-0.8540 support area in the coming sessions. The trend, however, remains unequivocally negative, and below those levels, the July 17 high in the 0.8515 area remains in the bears' sight.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | -0.46% | -0.14% | -0.09% | 0.18% | -0.14% | 0.01% | |
| EUR | 0.14% | -0.29% | -0.04% | 0.05% | 0.31% | -0.01% | 0.15% | |
| GBP | 0.46% | 0.29% | 0.27% | 0.36% | 0.61% | 0.30% | 0.47% | |
| JPY | 0.14% | 0.04% | -0.27% | 0.06% | 0.34% | -0.01% | 0.19% | |
| CAD | 0.09% | -0.05% | -0.36% | -0.06% | 0.27% | -0.06% | 0.13% | |
| AUD | -0.18% | -0.31% | -0.61% | -0.34% | -0.27% | -0.33% | -0.14% | |
| NZD | 0.14% | 0.01% | -0.30% | 0.00% | 0.06% | 0.33% | 0.18% | |
| CHF | -0.01% | -0.15% | -0.47% | -0.19% | -0.13% | 0.14% | -0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
