EUR/GBP Price Forecast: Can the Euro shake off weakness as rallies remain capped below 0.8400?

• Selling pressure takes EUR/GBP towards 0.8370, leaving it a few pips above the YTD low of 0.8361.
• Euro bulls remain constrained by elevated oil prices and persistent worries over France's debt.
• Confirmation of a bullish correction would require the pair to clear 0.8400.

Pressure on the Euro (EUR) has erased its earlier gains against the British Pound (GBP) on Tuesday, as elevated oil prices and persistent doubts over France's fiscal position weigh on sentiment. After failing to overcome the 0.8400 area on Monday, EUR/GBP is moving sideways just above 0.8370, within close reach of its year-to-date low of 0.8361.

With several of the world's major central banks due to announce monetary policy decisions this week, investors remain reluctant to take sizeable positions. At Thursday's meeting, the European Central Bank (ECB) is expected to keep interest rates unchanged while signalling a hike in the coming months, with inflation still well above target.

Markets have almost fully priced in a 25-basis-point increase ahead of next week's Bank of England (BoE) meeting in the UK. Those expectations follow last week's strong Gross Domestic Product (GDP) data and elevated consumer inflation readings.

In ING's assessment, “Sterling is riding on the coat-tails of PM Andy Burnham's popularity,” while “next week's UK budget looks unlikely to derail the recent EUR/GBP break below 0.8400.” On the outlook, the bank's note states that “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,”

Technical Analysis: Can bulls emerge as bearish momentum fades?

With losses consolidating only a few pips above the year-to-date lows, EUR/GBP is trading at 0.8375. Bearish pressure appears to be easing on the 4-hour charts: the Relative Strength Index (14) is hovering around 40, while the Moving Average Convergence Divergence (MACD) has turned positive. Buyers, however, have yet to emerge.

A break through the 0.8400 area, marked by the highs of 21 October and Monday, would be needed to confirm a bullish response. That would bring the 19 and 20 October highs near 0.8430 into focus. Beyond this, the 0.8480-0.8490 zone, containing the highs of 8, 9 and 15 October, would present a stronger resistance barrier.

The May 2025 low at 0.8355 provides the nearest support on the downside. A move below that level might draw sellers towards the April 2025 low of 0.8315.

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