EUR/GBP Struggles Near Lows on Weak Euro Sentiment

Key Moments

Euro Soft Against Sterling Ahead of Key Central Bank Meetings

The Euro (EUR) has given back earlier gains against the British Pound (GBP), with the EUR/GBP cross drifting back to the 0.8370 region on Tuesday. The pair is holding only a few pips above its year-to-date low at 0.8361 after sellers rejected an advance into the 0.8400 zone on Monday.

Sentiment toward the single currency remains pressured by elevated Oil prices and ongoing unease over France’s fiscal position. These factors continue to limit appetite for a sustained Euro recovery versus Sterling.

Market participants are also reluctant to take on sizeable directional exposure ahead of upcoming monetary policy decisions from several major central banks this week. The European Central Bank (ECB) is scheduled to meet on Thursday and is anticipated to keep interest rates unchanged while signaling the possibility of an increase in the months ahead, with inflation still running above its target.

Policy Outlook: ECB on Hold, BoE Expected to Hike

On the UK side, attention is turning to next week’s Bank of England (BoE) meeting. Market pricing is close to fully discounting a 25-basis-point rate hike, following stronger-than-expected Gross Domestic Product (GDP) data and firm consumer inflation readings released last week.

Analysts at ING argue that “Sterling is riding on the coat-tails of PM Andy Burnham’s popularity,” and that “next week’s UK budget looks unlikely to derail the recent EUR/GBP break below 0.8400.” Looking ahead, “the euro still has plenty of room to drop on French politics; EUR/GBP can stay offered in a 0.8360-0,8430 range for the time being,” says the bank in a note.

Technical Picture: Consolidation Near Lows With Resistance Intact

EUR/GBP is quoted around 0.8375, stabilizing after recent declines and holding just above the year-to-date bottom. On the 4-hour chart, momentum gauges indicate that downside pressure is easing: the 14-period Relative Strength Index is hovering near 40, and the Moving Average Convergence Divergence (MACD) has turned into positive territory. Despite this moderation in selling, buying interest remains limited.

From a resistance perspective, buyers would need to force a clear move through the 0.8400 zone – which capped prices on October 21 and again on Monday – to suggest a more convincing bullish correction. A break above that level would shift attention toward the highs from October 19 and 20, located near 0.8430. Beyond that, a more substantial barrier is seen in the 0.8480-0.8490 band, corresponding to the peaks recorded on October 8, 9 and 15.

On the downside, initial support is identified at the May 2025 low of 0.8355. A failure to hold this level could open the door for a move toward the April 2025 floor at 0.8315, where sellers may again test demand.