EUR/GBP Stalls Below Key Averages on UK Data, Political Risk

Key Moments

Choppy Trading as UK Data and Politics Pull in Opposite Directions

EUR/GBP is fluctuating in uneven trade on Thursday, with the British Pound (GBP) showing a slight edge over the Euro (EUR) as investors react to stronger UK economic data while weighing mounting political uncertainty in the United Kingdom. At the time of writing, the cross is quoted near 0.8659, having earlier touched an intraday peak of 0.8668.

Preliminary figures show that the UK economy expanded by 1.1% year-on-year in the first quarter of 2026, up from 1.0% in the previous quarter and above market expectations of 0.8%. On a monthly basis, UK GDP increased 0.3% in March, confounding forecasts for a 0.2% decline, although this marked a slight slowdown from February’s 0.4% rise.

Despite the upbeat growth numbers, the Pound has found it difficult to extend gains as domestic politics dampen appetite for the currency. Speculation about possible leadership challenges to Prime Minister Keir Starmer has intensified after Labour’s weak showing in recent local elections. UK Health Secretary Wes Streeting, widely seen as a prominent potential successor to Starmer, resigned from the government on Thursday.

Central Bank Expectations and Energy-Driven Inflation Concerns

Market participants are also closely monitoring the policy outlook for both the European Central Bank (ECB) and the Bank of England (BoE) in the context of Oil-related inflation risks tied to ongoing disruptions in the Middle East. Traders are currently pricing in at least two interest rate hikes from each central bank by year-end.

The Euro has struggled to draw support from the firmer pricing of ECB tightening. The Eurozone is perceived as more exposed to the current energy shock due to its heavier dependence on imported energy, fueling worries about slower economic activity. This backdrop has reinforced the view that the ECB could face comparatively greater challenges in implementing additional rate increases, leaving the short-term outlook for EUR/GBP skewed toward further downside.

Technical Picture: Upside Limited Below 50-day and 200-day SMAs

On the daily chart, EUR/GBP maintains a slightly bearish short-term profile while trading under both the 50-day Simple Moving Average (SMA) at 0.8671 and the 200-day SMA at 0.8702. The cross is consolidating beneath these overlapping trend indicators, implying that rebound attempts remain restricted for now. The Relative Strength Index (RSI) is hovering near 48, signaling a neutral-to-soft tone, while a marginally positive Moving Average Convergence Divergence (MACD) reading suggests only modest and tentative upward momentum.

On the upside, the first notable resistance is located at the 50-day SMA around 0.8671, followed by a more substantial barrier at the 200-day SMA near 0.8702. Sellers may look to re-engage if the pair tries to extend a recovery into this region. With no clearly defined support from major moving averages below current levels, any renewed selling pressure could leave EUR/GBP exposed to testing lower swing areas, keeping the broader risk biased toward additional softness as long as price holds beneath these key averages.

Pound Sterling Performance Against Major Currencies

The table below presents the current percentage change of the British Pound (GBP) versus a selection of major currencies. On the day, the Pound has shown its strongest relative performance against the Australian Dollar.

The heat map above reflects percentage changes between major currencies. The base currency is indicated in the left-hand column and the quote currency along the top row. For instance, selecting the British Pound from the left column and moving to the US Dollar column shows the percentage change for GBP (base)/USD (quote).