Key Moments
- EUR/GBP has hovered around 0.8620-0.8627 after sliding to fresh five-month lows and breaking support at 0.8645.
- Eurozone inflation and Services PMI data are expected to underline weak price pressures and slowing services growth, limiting support for the Euro.
- The pair has violated the neckline of a large Head & Shoulders pattern, with technical indicators signaling increasing downside momentum.
Euro Struggles Near Five-Month Lows Against the Pound
EUR/GBP has been trading almost unchanged on Wednesday, sitting just a few pips above a new five-month trough around 0.8620, as the British Pound continues to outperform. Since topping out at 0.8865 in mid-November, the cross has moved steadily lower, and selling pressure has intensified this week after price slipped beneath a key support band at 0.8645, with no notable rebound so far.
Macro Backdrop: Eurozone Data Seen as Unsupportive, UK Services in Focus
On the Eurozone side, Wednesday’s inflation figures are expected to confirm ongoing deflationary forces that recently led European Central Bank board member Martin Kocher to flag the possibility of additional rate cuts. At the same time, the region’s Services PMI is anticipated to show that activity expanded at the slowest pace in the last four months in January. Taken together, these signals are not the sort of backdrop that would typically underpin a meaningful Euro recovery.
In contrast, the UK Global S&P Services PMI is projected to confirm that services output accelerated to a 21-month high of 54.3 in January, up from 51.4 in December, highlighting a comparatively stronger performance in the UK’s key services sector.
Technical Outlook: Head & Shoulders Breakdown Points to Further Weakness
EUR/GBP is currently trading near 0.8627 after pushing decisively below the neckline of a sizable Head & Shoulders formation around 0.8645, a structure that is clearly visible on the daily chart. This breach constitutes a bearish technical signal that may mark the conclusion of the uptrend that dominated most of 2025.
Momentum studies on the daily timeframe point to increasing downside pressure. The Moving Average Convergence Divergence (MACD) line has slipped beneath its signal line just under the zero line, with the histogram turning modestly more negative. The Relative Strength Index (RSI) is holding below the 50 midline without yet indicating oversold conditions, which suggests that selling pressure remains in place.
On the downside, immediate supports are identified at the intraday low of 0.8423 and the August 15 low in the 0.8600 region. The measured objective of the Head & Shoulders pattern lies near the June 10 low, around the 0.8420 area. On the upside, the former neckline at 0.8645 is now expected to cap recoveries and act as resistance. A sustained move back above this level would invalidate the bearish bias and shift focus toward the January 27 high at 0.8716.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Performance Against Major Currencies This Week
The following table shows the percentage change of the Euro (EUR) versus major currencies this week. According to the data, the Euro has shown its strongest performance against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | -0.26% | 0.95% | 0.17% | -1.25% | -0.54% | 0.45% | |
| EUR | -0.10% | -0.40% | 0.87% | 0.07% | -1.36% | -0.64% | 0.35% | |
| GBP | 0.26% | 0.40% | 1.16% | 0.47% | -0.96% | -0.25% | 0.75% | |
| JPY | -0.95% | -0.87% | -1.16% | -0.77% | -2.21% | -1.43% | -0.76% | |
| CAD | -0.17% | -0.07% | -0.47% | 0.77% | -1.40% | -0.69% | 0.28% | |
| AUD | 1.25% | 1.36% | 0.96% | 2.21% | 1.40% | 0.72% | 1.73% | |
| NZD | 0.54% | 0.64% | 0.25% | 1.43% | 0.69% | -0.72% | 1.00% | |
| CHF | -0.45% | -0.35% | -0.75% | 0.76% | -0.28% | -1.73% | -1.00% |
The heat map above illustrates the percentage changes of major currencies relative to one another. The base currency is taken from the left-hand column and the quote currency from the top row. For instance, selecting the Euro from the left column and moving across to the US Dollar cell provides the percentage move for EUR (base)/USD (quote).
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