Euro Slips As Pound Tests Key Support Levels

Key Moments

Risk Mood Supports Pound as Euro Retreats

The Euro (EUR) continues to lose ground against the British Pound (GBP), marking a third consecutive day of declines as trading unfolds on Monday. The cross drops to 0.8555 at the time of writing, placing it roughly 0.3% below last week’s peak, with the Pound holding up better during a moderate risk-off tone tied to renewed tensions between the US and Iran. Washington has pledged an “economic D-Day” on Iran, putting geopolitical risks back in focus and dampening risk appetite.

Macroeconomic releases are limited on Monday. Data published on Friday indicated reasonably solid economic performance in both the UK and the Eurozone, although UK Retail Sales figures for July came in weaker than expected.

Analyst View: Carry Support Underpins Sterling

Analysts at ING note that in the current “low volatility environment, sterling is probably still enjoying some carry demand given it is one of the highest, volatility-adjusted currencies in G10.” In that context, they assess that “EUR/GBP can probably hang around these 0.8550 levels for the time being,” with the pair seen largely stable as market participants continue to favor the Pound’s carry characteristics.

Technical Picture: Sellers Eye 0.8550 and 0.8530

EUR/GBP is trading near 0.8556, sitting roughly in the middle of the range established over the past four weeks between 0.8530 and 0.8585. The short-term bias has tilted to the downside, with 4-hour momentum readings showing a moderately weak tone. The 14-period Relative Strength Index (RSI) is easing toward the mid-40s, and the Moving Average Convergence Divergence (MACD) has slipped marginally into negative territory. Together, these signals suggest that upside momentum is fading while the pair remains confined within a broader range.

On the downside, sellers are likely to confront initial support around the August 19 low near 0.8550. A move below there would shift attention to the 0.8530 region, which corresponds to the lows recorded on July 24 and August 12. A breakdown of that area would validate a Double Top pattern formed at 0.8585, implying a measured move that points a few pips beneath the late July trough at 0.8483.

On the upside, immediate resistance is located at Friday’s high of 0.8575, followed by the upper boundary of the July-August trading range around 0.8585.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

GBP Performance Against Major Currencies

The table below shows the percentage change of the British Pound (GBP) against major counterparts today. According to these figures, the Pound is strongest versus the Canadian Dollar.