Five consecutive weekly losses: EUR/GBP remains in a narrow range | Price Forecast

• EUR/GBP holds steady as the BoE's hawkish rate increase fails to give the Pound sustained support.
• Trading below key daily SMAs leaves the cross's wider bearish outlook unchanged.
• An elevated ADX indicates a strong downtrend, although RSI readings show oversold conditions.

EUR/GBP is trading around 0.8339 at the time of writing. The cross is little changed on Friday, close to levels last recorded in April 2025 and confined to this week's narrow range. After five consecutive weekly declines drove the pair into oversold territory, the muted trading suggests sellers are pausing.

A 25 basis point increase took the Bank of England’s (BoE) interest rate to 4% on Thursday. Markets barely responded, despite policymakers indicating that additional increases may be necessary to curb inflation. Meanwhile, worries about France’s fiscal outlook continue to support the Pound relative to the Euro (EUR).

BoE hawkishness fails to sustain Pound gains

The limited support for sterling was highlighted by Commerzbank analysts: “despite this rather hawkish decision, the Pound only benefited briefly and had to give up its gains as the day progressed.” While accepting that “at first glance, this may seem confusing,” they explain that “expectations ahead of the meeting were quite ambitious, with almost three further rate rises priced in by the middle of next year.” Markets also lacked a clearer policy path because Governor Andrew Bailey “gave no indication of the timetable following the next rate rise,” constraining their ability to price it in.

Commerzbank's assessment remains unchanged against this backdrop: “we remain firmly of the view that the BoE will not deliver a second interest rate rise until February rather than in December, as this would contradict its cautious approach to date.” The analysts also argue that “if the situation in the Middle East has stabilised by then and energy exports have normalised, the case for further interest rate hikes will be weaker.” Their conclusion is that “until then, the Pound is likely to struggle to trade any higher.”

EUR/GBP technical outlook

Trading beneath the 50-, 100- and 200-day Simple Moving Averages (SMAs) leaves EUR/GBP with a bearish short-term outlook on the daily chart. These averages are grouped between approximately 0.8489 and 0.8599.

At around 24, the Relative Strength Index (RSI) indicates oversold conditions. The Moving Average Convergence Divergence (MACD) has edged just above zero but retains a very shallow profile, suggesting selling momentum remains strong without accelerating. This is consistent with the elevated Average Directional Index near 50, which indicates a mature downtrend.

A recovery would first encounter resistance at 0.8350, then at 0.8400 and 0.8450. Further obstacles are the 50-day SMA at 0.8489, followed by the 100-day SMA at 0.8523 and the 200-day SMA at 0.8599.

The recent low around 0.8330 provides immediate support. Should selling pressure return and extend the decline, the next horizontal level to watch is 0.8300.

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