EUR/GBP Bulls Struggle as Key 0.8655 Barrier Caps Upside

Key Moments

EUR/GBP Pulls Back After Test of Former Support

EUR/GBP began the week on a mildly softer footing for the Euro, with the cross retreating toward the 0.8650 region at the time of writing. The pair eased from intraday highs close to 0.8660 but maintained a cautiously constructive bias after last week’s rebound from lows around 0.8620.

The 0.8655 area – previously an important support – has now emerged as a significant resistance level, rejecting the latest bullish attempt and constraining further upside for the moment.

Sterling Supported Despite UK Political Headwinds

The British Pound was moderately bid in relatively calm Monday trading, even as the political backdrop in the UK remained unsettled. The aftermath of Thursday’s local elections continued to cast a shadow over the outlook for Prime Minister Keir Starmer.

An “increasingly criticised” Starmer is said to be preparing multiple economic initiatives and working on efforts “to rebuild ties with Europe,” but his standing has deteriorated following last week’s electoral setback. According to the article, calls for his resignation have intensified, including from within his own party, creating an environment that could cap further near-term gains for the Pound.

Euro Sentiment Dampened by Geopolitics and Oil Spike

The Euro remained under pressure after developments in the geopolitical sphere. The article notes that US President Donald Trump rejected Iran’s latest peace proposal, undermining expectations for a swift reopening of the Strait of Hormuz.

In response, Brent crude prices moved above the key $100 level, curbing optimism for the Euro. Higher oil prices pose a particular challenge for Eurozone economies that rely heavily on imported energy, adding an additional headwind for the single currency.

Technical Picture: Bulls Eye Break Above 0.8655

From a technical standpoint, EUR/GBP is displaying an immediate bullish bias. The formation of a double bottom around the 0.8620 region last week, together with constructive recent price action, indicates the potential for further recovery. However, the prior support band at 0.8655 has so far capped the advance and is currently restraining bullish momentum.

On the 4-hour chart, momentum readings are mildly supportive. The Relative Strength Index (RSI) is positioned just above the midpoint, while the Moving Average Convergence Divergence (MACD) is marginally in positive territory. Taken together, these indicators point to a modest but ongoing bullish tone.

If buyers manage to clear the 0.8655 area, the next upside objective would be a move toward levels above 0.8680, in proximity to the April 24 and 28 highs. Beyond that, further resistance is identified near 0.8720, corresponding to the April 17 and 21 peaks.

On the downside, ascending trendline support from last week’s troughs is currently located around 0.8643, with Friday’s low seen near 0.8635. This band is expected to offer initial support on any renewed bearish attempt ahead of the 0.8620 zone, which coincides with the April 30 and May 5 lows.

Euro Performance Against Major Currencies

The table below summarizes the Euro’s percentage changes against a basket of major currencies today. According to the data, the Euro showed its strongest performance versus the New Zealand Dollar.