EUR/GBP retakes 0.8600, struggles to capitalize on its recovery from over one-week low


  • EUR/GBP rebounds from over a one-week low touched during the Asian session on Wednesday.
  • The worsening UK economic outlook undermines the GBP and prompts intraday short-covering.
  • Expectations that the ECB will end its rate-hiking cycle soon act as a headwind and .cap gains.

The EUR/GBP cross stages a modest recovery from over a one-week low touched during the Asian session on Wednesday and retakes the 0.8600 round-figure mark in the last hour. Spot prices, for now, seem to have snapped a two-day losing streak, though the mixed fundamental backdrop warrants some caution before placing aggressive bullish bets.

A bleak outlook for the UK economy undermines the British Pound (GBP), which turns out to be a key factor that prompts some intraday short-covering around the EUR/GBP cross. In fact, the National Institute of Economic and Social Research (NIESR) said that there was a 60% risk of the government going to the polls during a recession. In its quarterly update, the NIESR added that it would take until the third quarter of 2024 for UK output to return to its pre-pandemic peak.

This comes after a report from the British Retail Consortium showed on Tuesday that UK Retail Sales in July registered its weakest year-on-year growth since August 2022. Furthermore, the Recruitment and Employment Confederation (REC) said on Monday that British employers reduced the number of new permanent staff they hired through agencies by the most since mid-2020. This, along with the Bank of England's (BoE) less hawkish forward guidance, continues to undermine the GBP.

It is worth recalling that the BoE raised its key benchmark interest rate by 25 bps to a 15-year peak level of 5.25% last Thursday and signalled that the tightening cycle may be nearing an end. The UK central bank called its current monetary policy stance "restrictive" and forced investors to scale back expectations for the peak rate. However, speculations that the European Central Bank (ECB) will halt its streak of nine consecutive rate hikes in September might cap the upside for the EUR/GBP cross.

In fact, the ECB, in its economic bulletin published last Friday, noted that the underlying inflation in the region likely peaked during the first half of 2023. Adding to this, Fitch Ratings said on Friday that falling Euro Zone inflation puts ECB rates peak within sight. This makes it prudent to wait for strong follow-through buying before positioning for any further intraday appreciating move ahead of important UK macro releases, including the prelim Q2 GDP report, due on Friday.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.86
Today Daily Change 0.0006
Today Daily Change % 0.07
Today daily open 0.8594
 
Trends
Daily SMA20 0.86
Daily SMA50 0.8585
Daily SMA100 0.8675
Daily SMA200 0.8725
 
Levels
Previous Daily High 0.8626
Previous Daily Low 0.8594
Previous Weekly High 0.8656
Previous Weekly Low 0.855
Previous Monthly High 0.8701
Previous Monthly Low 0.8504
Daily Fibonacci 38.2% 0.8606
Daily Fibonacci 61.8% 0.8613
Daily Pivot Point S1 0.8584
Daily Pivot Point S2 0.8573
Daily Pivot Point S3 0.8552
Daily Pivot Point R1 0.8615
Daily Pivot Point R2 0.8636
Daily Pivot Point R3 0.8647

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds ground above 1.1700 amid softer US Dollar

EUR/USD holds ground above 1.1700 amid softer US Dollar

EUR/USD holds ground above 1.1700 in the European session on Thursday. The pair stays supported as the US Dollar faces headwinds from lingering US tariffs and economic concerns. Attention turns to central bank talks and mid-tier US data for fresh trading impetus. 

Crypto market sees $500 million in liquidation as Bitcoin hit record highs amid dovish Fed minutes

Crypto market sees $500 million in liquidation as Bitcoin hit record highs amid dovish Fed minutes

Bitcoin reached a new all-time high of $111,999 on Wednesday amid dovish Fed minutes, fueling wider market optimism. CoinGlass data shows that over $500 million in leveraged positions were liquidated across crypto markets in the past 24 hours.

GBP/USD stays well bid above 1.3600 as US Dollar continues to sag

GBP/USD stays well bid above 1.3600 as US Dollar continues to sag

GBP/USD trades with moderate gains above 1.3600 in European trading on Thursday. The US Dollar softens against the Pound Sterling amid growing uncertainty around the impact of Trump's tariffs on the economy and the Fed's interest rate outlook. Fedspeak and US data are awaited. 

Gold price builds on steady intraday ascent amid softer USD, trade worries

Gold price builds on steady intraday ascent amid softer USD, trade worries

Gold price is building on the overnight bounce from a one-and-a-half week low and gaining positive traction for the second straight day on Thursday. Investors remain on edge amid uncertainties surrounding US President Donald Trump's erratic trade policies and their impact on the global economy. 

New US tariffs target Asia, but some countries stand to gain

New US tariffs target Asia, but some countries stand to gain

President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.

Best Brokers for EUR/USD Trading

Best Brokers for EUR/USD Trading

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025