CFD Trading Rate Euro vs Great Britain Pound (EURGBP)

• EUR/GBP falls after the release of higher-than-expected UK Consumer Price Index data.
• The UK CPI inflation climbed to 2.3% YoY in October, the highest in six months, up from 1.7% in September.
• German Producer Price Index fell by 1.1% YoY in October, marking the 16th consecutive period of producer deflation.

EUR/GBP loses ground to near 0.8330 during the early European hours. The Pound Sterling (GBP) appreciates following the stronger Consumer Price Index (CPI) data from the United Kingdom (UK) released on Wednesday.

The UK CPI inflation climbed to 2.3% year-over-year in October, the highest in six months, up from 1.7% in September and surpassing forecasts of 2.2%. On a monthly basis, the CPI increased by 0.6% after remaining unchanged in September. Meanwhile, the annual Core CPI, which excludes volatile food and energy prices, rose to 3.3% during the same period, exceeding market expectations of 3.1%. Additionally, the Retail Price Index increased by 3.4% year-over-year, compared to 2.7% in September.

In Germany, the Producer Price Index (PPI) fell by 1.1% year-on-year in October, following a 1.4% decline the previous month, in line with market expectations. This marks the 16th consecutive period of producer deflation. On a monthly basis, producer prices rose by 0.2%, rebounding from a 0.5% drop in September, also matching market estimates.

Since June, the ECB has reduced rates three times as inflation approaches its 2% target, although growth forecasts have been downgraded twice. Markets largely anticipate a 25-basis-point rate cut next month, with a smaller chance of a more significant reduction.

On Wednesday, ECB President Christine Lagarde is set to deliver the opening remarks at the ECB’s Conference on Financial Stability and Macroprudential Policy in Frankfurt. Investors will also be closely watching the preliminary Purchasing Managers’ Index (PMI) figures from the Eurozone and Germany, which are scheduled for release on Friday.

• EUR/GBP rises past the 50-day SMA of 0.8359, setting sights on the 0.8400 resistance.
• If breached, next key levels include the 100-day SMA at 0.8413, October 31 high of 0.8448.
• Downside risks remain; a dip below 0.8359 could see consolidation or a retest of the 0.8260 level.

The EUR/GBP extended its gains for the fourth straight day, edged up above the 50-day Simpl Moving Average (SMA), and was exchanging hands at 0.8373 at the time of writing.

EUR/GBP Price Forecast: Technical outlook

After hitting a year-to-date (YTD) low of 0.8260, the EUR/GBP has climbed past the 0.8300 figure, cleared on its way the 50-day Simple Moving Average (SMA) of 0.8359 and paving the way for a test of 0.8400. A breach of the latter will expose the 100-day SMA at 0.8413, followed by the October 31 swing high of 0.8448.

Conversely, if EUR/GBP slips beneath the 50-day SMA at 0.8359, the pair might consolidate within the 0.8300-0.8359 area unless sellers drive the exchange rate below the bottom of the range, which would open the door to test 0.8260.

Indicators such as the Relative Strength Index (RSI) hint buyers are in charge after turning bullish once they clear the 50 neutral line.

EUR/GBP Price Chart – Daily

• EUR/GBP flat lines around 0.8355 in Tuesday’s early European session. 
• ECB’s Vujcic said the risk of undershooting the inflation goal has risen. 
• The UK GDP fell by 0.1% MoM in September, weaker than expected. 

The EUR/GBP cross trades on a flat note near 0.8355 during the early European session on Tuesday. The rising bets for more aggressive rate cuts by the European Central Bank (ECB) might drag the Euro (EUR) lower against the Pound Sterling (GBP). Investors brace for the Eurozone October Harmonized Index of Consumer Prices (HICP) data, which is due later on Tuesday.

The ECB Governing Council member Boris Vujcic said on Monday that the danger that the ECB will fall short of its 2% inflation goal has risen, per Bloomberg. Meanwhile, the ECB policymaker Yannis Stournaras noted that the bank is almost certain to cut interest rates by a quarter point in December. 

The ECB has cut its key interest rate by 25 basis points to 3.25% last month and is anticipated to reduce rates further again in December at its final decision of the year. However, investors await the Eurozone HICP data for fresh impetus about the inflation outlook. If the report shows the hotter-than-expected outcome, this could dampen the hope for the ECB jumbo rate cut, which might lift the shared currency. 

On the other hand, a surprise contraction in UK Gross Domestic Product (GDP) for September could weigh on the GBP. The UK economy shrank by 0.1% MoM in September, following growth of just 0.2% the previous month, according to the Office for National Statistics on Friday. This figure came in weaker than the 0.2% expansion expected. 

However, Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said a rate reduction at the Bank of England’s (BOE) meeting in December now looks “improbable” as inflation concerns and rising global headwinds would likely prevent policymakers from pursuing back-to-back rate cuts. The release of UK Consumer Price Index (CPI) data for October on Wednesday could offer some hints about the rate cuts path for the December meeting.

• EUR/GBP crosses key 0.8350 threshold but faces resistance near 0.8400, with current trading influenced by UK GDP concerns.
• Potential upside could see the cross target the 100-day SMA at 0.8413, with further resistance at the 200-day SMA at 0.8475.
• Downside risks remain if the pair retreats, with support levels at recent lows of 0.8306 and 0.8260.

The Euro recovered some ground versus the British Pound on Monday as traders digested the latest UK Gross Domestic Product (GDP) report, which hinted the economy is slowing down. The EUR/GBP trades at 0.8359, up by 0.11%.

EUR/GBP Price Forecast: Technical outlook

The EUR/GBP extended its gains past the psychological 0.8350 area, though buyers remain unable to crack 0.8400. Additionally, sellers leaning to the 50-day Simple Moving Average (SMA) at 0.8360 keep the cross pair from reaching 0.84 despite printing a daily peak of 0.8373.

If bulls clear 0.8373 and 0.84, the next stop would be the 100-day SMA at 0.8413. A breach of the latter will expose the 200-DMA at 0.8475.

Conversely, if EUR/GBP retreats below 0.8350, the first support would be the November 14 low of 0.8306. Once surpassed, the next floor would be the November 11 swing low of 0.8260.

Oscillators such as the Relative Strength Index (RSI) suggest bulls are gathering momentu, as the RSI cleared its neutral line, turning bullish.

EUR/GBP Price Chart – Daily

The big event in the GBP market this week is the release of the October CPI report on Wednesday, ING’s FX analysts Francesco Pesole notes.

‘Core services’ inflation to slow down to 4.3%

“As usual, markets will be looking almost solely at the services inflation figure, which our economist sees accelerating marginally from 4.9% to 5.0%. However, when stripping out categories that are less relevant for the Bank of England, we see a substantial slowdown to 4.3% in ‘core services’ inflation.”

“That would be good news for the BoE, but probably not enough to justify another cut in December. Incidentally, markets might focus a bit more on the ‘non-core’ services CPI figure, sticking to cautious BoE pricing and put a cap on the recent tentative rebound in EUR/GBP.”

“Our view on the pair remains moderately bearish in the near term as we see any dovish repricing in BoE expectations coming after a December outsized ECB cut.”  

• EUR/GBP faces challenges as traders expect the ECB to deliver a rate cut in December.
• The European Commission forecasts 0.8% growth for the Euro Area in 2024, maintaining its projection from the Spring estimate.
• UK Economist Ruth Gregory expects that the BoE will hold interest rates steady at 4.75% in December.

EUR/GBP remains stable near 0.8350 during early European trading hours on Monday. The EUR/GBP cross faces headwinds as the Euro remains under pressure due to the European Central Bank's (ECB) dovish outlook, with a policy rate cut anticipated at its December meeting.

In its Autumn 2024 forecast, the European Commission predicts 0.8% growth for the Euro Area in 2024, unchanged from its Spring estimate. However, the growth projection for 2025 has been slightly lowered to 1.3% from 1.4%, while the Eurozone economy is expected to expand by 1.6% in 2026.

Commenting on the outlook, EU Economy Commissioner Paolo Gentiloni remarked, "As inflation continues to ease and growth in private consumption and investment gains momentum, coupled with record-low unemployment, growth is expected to gradually accelerate over the next two years."

The UK economy expanded by 0.1% quarter-on-quarter in the three months ending September, slowing from the 0.5% growth seen in Q2 and missing market expectations of a 0.2% increase. Year-on-year, UK GDP grew by 1.0% in Q3, aligning with forecasts and improving on the 0.7% growth recorded in Q2. On a monthly basis, GDP contracted by 0.1% in September, reversing a 0.2% gain in August.

Capital Economics’ Deputy Chief UK Economist Ruth Gregory reiterated their expectation that the Bank of England (BoE) will maintain rates at 4.75% in December, with a 25-basis-point rate cut anticipated in February.

UK GDP is a bit disappointing, owing to a surprise fall in activity during September. The 0.1% third-quarter figure is a far cry from the 0.7% and 0.5% in the first and second quarters. Does that show the economy has slowed? Yes, but not as much as the figures suggest, ING’s FX analyst Francesco Pesole notes.

BoE pause in December is the most likely outcome

“A lot of that strength seen in the first half of the year was in non-tradable and non-consumer sectors that have less to do with underlying economic fundamentals. The Bank of England has agreed that the true rate of growth was probably slower in the first half. However, we think the BoE/consensus forecast for the winter is a bit high, and while real wage growth should generate higher GDP, the pace is set to be fairly moderate in the near term before receiving a bit of a budget boost next year.

“GDP was a bit weaker than expected, but it's still not that surprising, particularly given the volatility in the recent data. The BoE is much more focused on the services inflation figures that we'll get next week. In the near-term, they're likely to remain sticky around 5%. Barring a downside surprise, we think a pause in December is the most likely outcome.”

“EUR/GBP has hovered just above 0.830 as a wide rate differential continues to put pressure on the pair. Given we see a low probability of the BoE cutting in December while our call is for a 50bp move by the ECB next month, we struggle to see much upside for EUR/GBP before year-end.”

• EUR/GBP rose by 0.14% to 0.8320 in Thursday's trading session.
• Bears took a breather after recent declines but technical indicators remain deeply negative.
• RSI signals recovering buying pressure while MACD suggests flattening selling pressure, overall outlook mixed.

The EUR/GBP pair rose to 0.8320 in Thursday's session. Despite a temporary respite for the bears after recent declines, technical indicators remain deeply negative, with the pair trading below the 20-day Simple Moving Average (SMA) which stands around 0.8340. This suggests that the short-term outlook remains bearish until this level is conquered.

The Relative Strength Index (RSI) which measures the strength of buying and selling pressure, has a reading of 47 and points up, indicating that buying pressure is recovering. The Moving Average Convergence Divergence (MACD), which is a trend-following indicator, is flat and in red, suggesting that selling pressure is flat. With the RSI suggesting that buying pressure is recovering, while the MACD, it suggests that selling pressure is flat and it points out that the pair may consolidate in the next sessions.

Support levels can be found at 0.8300, 0.8250, and 0.8230, while resistance levels can be found at 0.8340, 0.8360, and 0.8400.

EUR/GBP daily chart

• EUR/GBP trades with mild losses around 0.8310 in Thursday’s early European session. 
• BoE Chief Economist Pill sounded cautious on rate cuts. 
• ECB’s Rehn said the December cut is likely with disinflation on track. 

The EUR/GBP cross trades with mild negative bias near 0.8310 during the early European session on Thursday. The flash Eurozone Gross Domestic Product (GDP) number for the third quarter (Q3) will be released later on Thursday. The Bank of England (BoE) Governor Andrew Bailey and the European Central Bank (ECB) President Christine Lagarde are scheduled to speak later on the same day. 

The UK Unemployment Rate rose more than expected to 4.3% for the three months ending in September, weighing on the Pound Sterling (GBP). ”The higher (UK) unemployment rate could see the market start to price in a higher chance of a rate cut from the Bank of England (BoE) next month," noted XTB analysts.

However, the Bank of England Chief Economist Pill remains cautious, saying that wage growth “remains quite sticky” at elevated levels and is “hard to reconcile with the UK inflation target.” Pill further stated, “We have seen a substantial disinflation in the UK economy, and that has allowed monetary policy restriction to be reduced. 

The hawkish remarks from the BOE might cap the downside for the GBP for the time being. Traders await the speech from the BoE's Bailey on Thursday for some hints about the UK interest rate outlook. 

The ECB policymaker Olli Rehn said on Tuesday that additional interest rate cuts are coming and the deposit rate could hit the so-called neutral level in the first half of next year. The expectation that the ECB is likely to deliver more rate cuts than the BoE might undermine the Euro (EUR) in the near term. 

Markets have fully priced in a 25 basis points (bps) rate cut then, as well as a nearly 20% chance of a larger 50 bps move. Looking ahead, investors will keep an eye on the ECB's President Christine Lagarde’s speech on Thursday.

• EUR/GBP bounced from multi-year lows after weak UK labor market data led to a sell-off in the Pound. 
• The pair remains pressured, however, by risks to the outlook for the Eurozone as the US gears up to implement tariffs. 
• Political uncertainty in Germany and the Pound’s positive relationship to risk are further bearish factors for EUR/GBP. 

EUR/GBP bounces off two-and-a-half year lows in the 0.8200s to trade back up in the 0.8330s on Wednesday after UK labor market data showed a rise in the Unemployment Rate which increased speculation the Bank of England (BoE) might cut interest rates in December. 

Previously the UK central bank had been one of the few major central banks expected not to cut rates at the end of the year because of stubbornly high inflation. The expectation of interest rates remaining relatively elevated in the UK had been a supportive factor for the Pound Sterling (GBP), since they attract greater inflows of foreign capital. 

The UK Unemployment Rate rose to 4.3% in the three months to September from 4.0% in the previous period, according to data from the Office of National Statistics (ONS), released on Tuesday. The reading was also well above economists’ expectations of 4.1%. It indicated a weakening labor market and could put pressure on the BoE to cut interest rates in order to stimulate borrowing, growth and job creation.  

That said, other UK employment data was not as poor suggesting the Pound Sterling (GBP) could recover and EUR/GBP upside is likely to remain capped. UK Average Earnings Including Bonus’ increased 4.3% from a revised up 3.9% previously and 3.9% expected. UK Average Earnings Excluding Bonus’ rose by 4.8%, beating estimates of 4.7%, though below the 4.9% previously. The higher wages suggest inflationary pressures might increase, forcing the BoE to keep interest rates at their current elevated level, thereby strengthening Sterling, with bearish implications for EUR/GBP. 

The Euro (EUR) also remains vulnerable due to growth concerns, the political crisis in Germany and fear of the US imposing tariffs on European imports, further weighing on the pair. President-elect Donald Trump warned he would make the Eurozone “pay a big price” for not buying enough American-made goods, which suggests he is working up to slapping tariffs on Euro Area imports. The imposition of tariffs has led economists to downgrade their forecasts for Eurozone Gross Domestic Product (GDP) by “a minimum of 0.3pp cumulative over 2025-26” according to Japanese lender Nomura.  

The Single Currency is feeling the pressure from political uncertainty in Germany after the collapse of Chancellor Olaf Scholz's governing coalition. The country is set to hold snap elections on February 23, 2025, however, until then Germany’s political problems will probably be a continued source of risk for the Euro, and a downside risk to EUR/GBP. 

According to analysts at Goldman Sachs, the Pound is more resilient to the geopolitical shocks compared to the Euro and this is bearish for the pair. GBP is also more positively aligned to risk-on and has a “positive beta to global risk”. Should US equities continue to rally as a result of the outlook due to the new administration in Washington, this should further support Sterling, suggesting downside pressure for EUR/GBP which could even revisit its over-two-year lows. 

(This story was corrected on November 13 at 14:56 GMT to say that UK employment data was released on Tuesday not Wednesday).

 

• EUR/GBP is in a downtrend and at two-and-a-half year lows, however, fundamentals do not support a reversal. 
• The Eurozone economy is expected to be worse hit by US trade tariffs amid already weak growth. 
• German political instability and GBP’s resilience to geopolitical risk are further factors weighing on the pair.

EUR/GBP trades flat on Tuesday as it finds its feet following a five-day losing streak. The pair is trading at over two-and-a-half-year lows in the 0.8280s, driven by a mixture of Euro (EUR) weakness and Pound Sterling (GBP) resilience. It is in a downtrend on all major timeframes. 

EUR/GBP Weekly Chart

The Euro is depreciating on a combination of fears that the imposition of tariffs by the US will dent already weak growth, political uncertainty in Germany. This was reflected in  the lower ZEW sentiment data for both the Euro Area and Germany released on Tuesday. 

Economists at Nomura forecast Eurozone Gross Domestic Product (GDP) to fall “by a minimum 0.3pp cumulative over 2025-26” as a result of US trade tariffs brought in by the Trump administration. 

Interest rates in the UK are expected to remain higher than in the Eurozone as the outlook for growth in the UK remains positive compared to the Eurozone. Relatively higher interest rates will bolster the Pound compared to the Euro, potentially driving EUR/GBP lower.

“The political crisis in Germany, dovish ECB pricing vs Fed and BoE, and the threat of tariffs on EU exports to the US (€500bn per annum, or 2.5% of GDP worth) are combining for a bleak backdrop (for the Euro) into year-end,” says Kenneth Broux, Senior Strategist at Societe Generale, “..we can’t see any lasting bounce materialising until after the German confidence vote and snap elections,” he adds. 

The Pound is more resilient to the geopolitical shocks compared to the Euro, according to analysts at Goldman Sachs. GBP is also more positively aligned to risk-on and has a “positive beta to global risk” adds the bank. Should US equities continue to rally as a result of the outlook due to the new administration in Washington, this should further support Sterling. 

The Bank of England (BoE) is unlikely to cut interest rates in December which makes it an outlier amongst major central banks, including the European Central Bank (ECB). 

This is likely to support GBP since relatively high interest rates attract more foreign capital inflows. 

The BoE’s bank rate is already quite high at 4.75% compared to the ECB’s main refinancing operations rate of 3.40%, suggesting an overall downside bias for EUR/GBP. 

• EUR/GBP gains traction to near 0.8295 in Tuesday’s early Asian session. 
• The UK Unemployment Rate climbed to 4.3% in three months to September.
• The ECB is on track to deliver more rate cuts.

The EUR/GBP cross gathers strength to around 0.8295 during the early European session on Tuesday. The Pound Sterling (GBP) weakens against the Euro (EUR) after the recent mixed UK labor market data. The attention will shift to the German November ZEW survey, which is due later on Tuesday. 

Data released by the Office for National Statistics (ONS) on Tuesday showed that the UK ILO Unemployment Rate rose to 4.3% in the three months to September from 4.0% in the previous period. This figure came in weaker than the expectation of 4.1%. Meanwhile, the Claimant Count Change increased by 26.7K in October versus 10.1K prior (revised from 27.9), below the market consensus of 30.5K. 

UK Wage inflation, as measured by Average Earnings excluding Bonus climbed 4.8% 3M YoY in September versus 4.9% in August,  beating the estimation of a 4.7% rise. Average Earnings including Bonuses also rose by 4.3% in the same period, compared to 3.9% (revised from 3.8%) quarter through September. The Pound Sterling attracts some sellers in an immediate reaction to the UK employment report. 

On the other hand, the European Central Bank (ECB) policymaker Robert Holzmann said on Sunday that there is no reason for the European Central Bank not to cut interest rates in December, but the decision will be based on the incoming data. The expectation that the ECB is likely to deliver more rate cuts might cap the upside for the cross in the near term. Markets have fully priced in a 25 basis points (bps) rate cut then, as well as a nearly 20% chance of a larger 50 bps move. 

• EUR/GBP declined 0.27% on Monday to near 0.8270, its lowest since March 2022.
• The EUR/GBP pair remains in a strong downtrend, extending its losses over the past five trading days.
• The RSI indicator is showing that selling pressure is rising, while the MACD indicator also indicates a bearish momentum.

The EUR/GBP pair fell on Monday, extending its losses and approaching multi-year lows. The decline continues a five-day downward trend, with the pair reaching 0.8270 on Monday after a 0.27% drop. Technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point to bearish conditions, with selling pressure rising and overall momentum biased to the downside.

In the technical analysis, the RSI is at 38 and trending down, indicating rising selling pressure. The MACD histogram is below zero and red, further emphasizing the bearish momentum. Within the price action sphere, EUR/GBP has support levels at 0.8250, 0.8230, and 0.8210, and resistance levels at 0.8330, 0.8370, and 0.8390. These levels can provide guidance for potential trading opportunities.

The EUR/GBP pair continues to trade under bearish pressure, extending its downtrend and reaching multi-year lows since March 2022. Technical indicators, such as the RSI and MACD, indicate that selling pressure is escalating, while the extended losing streak and recent decline suggest that the trend is likely to persist.

EUR/GBP daily chart

• EUR/GBP breaks below support from the floor of a six-week range. 
• The pair resumes its long-term bear trend. 

EUR/GBP has broken decisively below the base of a six-week range (red dashed line on chart) and is in free fall. 

EUR/GBP Daily Chart 

 

The pair is likely to fall substantially lower as the bearish trend resumes. The usual technical method of determining how far, is to take the height of the prior range and extrapolate it lower. A conservative estimate lies at the Fibonacci 61.8% extrapolation, at 0.8225. 

A more optimistic forecast at the 100% extension, at 0.8171. 

• EUR/GBP pair is on a four-day losing streak, reaching lows not seen in over a week
• The MACD's rising red bars and declining RSI indicate increasing bearish momentum, suggesting further weakness for the pair.
• Pair has broken deep below its 20-day SMA, reaching multi-week lows.

The EUR/GBP fell towards 0.8310 as sellers continue pushing downwards but will face strong support at the psychological 0.8300 area.
The cross has been on a downward trajectory, breaking below its 20-day SMA and reaching multi-week lows. Technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) confirm this bearish trend, signaling increasing selling momentum. The pair has recorded four consecutive days of losses, indicating that the selling pressure is intensifying, and further declines are possible.

The RSI is currently in negative territory at 42, with a mildly declining slope, implying that sellers are gaining momentum. The MACD's rising red histogram and elevated volume further support the bearish sentiment, indicating that bearish forces are dominating the market.

Support levels: 0.8300, 0.8275, 0.8250.
Resistance levels:0.8330, 0.8350, 0.8375. 

EUR/GBP daily chart

• EUR/GBP has met support at the floor of a five-week range. 
• It will probably recover as the pair extends its range sideways. 

EUR/GBP has fallen down to the base of its six-week range (red dashed line on chart) at roughly 0.8311; it is likely encountering firm support at that level.

EUR/GBP 4-hour Chart 

The pair is probably in a sideways trend on a short-term basis and given the technical analysis maxim that “the trend is your friend” the odds favor an extension of this range-bound price action. 

As such, EUR/GBP will probably bounce off the range floor and start to rise back up within the range thereby extending the sideways trend. 

If EUR/GBP breaks decisively below the 0.8311 floor, however, it would suggest the medium and long-term downtrends were reasserting themselves.  

A longer-than-average daily candlestick below the 0.8311 lows, or perhaps three consecutive red candles that break below the level, would confirm a decisive breakdown. Such a move would probably lead to a sell-off to around the 0.8240 level, this being the 61.8% Fibonacci extension of the height of the range extrapolated lower. 

• EUR/GBP extends the decline to near 0.8310 in Friday’s early European session. 
• The negative outlook of the cross remains intact as the price holds below the 100-day EMA, with bearish RSI indicator. 
• The immediate resistance level emerges at 0.8355; the first downside target is seen at 0.8290.

The EUR/GBP cross remains on the defensive around 0.8310 on Friday during the early European trading hours. The Bank of England (BoE) cut interest rates by 25 basis points (bps) at its November meeting on Thursday, bringing the benchmark rate to 4.75%. BOE Governor Andrew Bailey said during the press conference that the central bank needs to retain a “gradual approach” to policy easing.

However, the expectation that the BoE would cut rates less aggressively than the European Central Bank (ECB) could provide some support to the Pound Sterling (GBP) and cap the upside for the cross in the near term. 

According to the 4-hour chart, the negative outlook of EUR/GBP prevails as the cross remains capped below the key 100-period Exponential Moving Averages (EMA). Furthermore, the downward momentum is reinforced by the Relative Strength Index (RSI), which is located below the midline near 35.55, indicating that the further downside cannot be ruled out. 

The first downside target for the cross emerges near the lower limit of the descending trend channel at 0.8290. A breach of this level could see a drop to 0.8230, the low of March 4, 2022. The next contention level to watch is the 0.8200 psychological level.

In the bullish case, the crucial resistance level is seen at 0.8355, representing the confluence of the upper boundary of the trend channel and the 100-period EMA. A decisive break above this level could see a rally to 0.8419, the high of November 4.  

EUR/GBP 4-hour chart

• The EUR/GBP declined on Thursday, extending its losses to three consecutive sessions.
• Technical indicators suggest that the bearish trend may continue in the near term.
• The pair is currently testing support at 0.8320-0.8330, with a break below this level potentially leading to further declines.

The EUR/GBP pair has been under pressure in recent sessions, breaking below its 20-day Simple Moving Average (SMA). This move has pushed the pair to its lowest point in over a week. Technical indicators are now signaling a potential increase in selling pressure, suggesting that the bearish trend may continue in the near term.

The Relative Strength Index (RSI) is at 44, indicating that the pair is in negative area. The slope of the RSI is mildly declining, suggesting that selling pressure is rising. The Moving Average Convergence Divergence (MACD) is green but decreasing, indicating that buying pressure is declining.

The EUR/GBP currency pair has witnessed a significant decline, breaking below its crucial 20-day Simple Moving Average (SMA). This move has pushed the pair to its lowest levels in over a week, indicating a shift in momentum. Technical indicators, such as the RSI and the MACD, are now signaling a buildup of selling pressure. The RSI has dropped below 50 neutral level, while the MACD prints lower green bars, suggesting a potential further decline in the EUR/GBP.

EUR/GBP daily chart

• EUR/GBP sinks back down to lows not seen since 2022 after the Bank of England decision on Thursday. 
• Even though the BoE decided to cut interest rates as expected, their uncertainty over the impact of the Budget supported GBP. 
• The Euro had a mixed day after weak German export and industrial data but strong overall Retail Sales from the region. 

EUR/GBP trades marginally lower on Thursday, in the 0.8320s as it consolidates just above two-and-a-half year lows, and the bottom of a five-week range. 

The pair started Thursday deep in the red after the release of lackluster German Industrial Production and Export data weighed on the Euro (EUR). 

EUR/GBP Daily Chart

World-renowned exporter Germany suffered a bad month in September as exports fell 1.7%, below both the previous and expected rate. Industrial Production in Europe’s largest economy, meanwhile, declined 2.5% in the same period, also below the estimates of economists, though not as low as the month before.

EUR/GBP then recovered and rose during the European session after upbeat Eurozone Retail Sales data showed shoppers continuing to spend liberally despite relatively high borrowing costs and constrained growth. This gave the Single Currency a boost and the pair sailed higher.

Retail Sales in the Euro Area rose by 2.9% YoY in September, and were revised up from 0.8% to 2.3% in August. The result also beat expectations of 1.3%.

On a monthly basis, Retail Sales rose 0.5% which was above expectations of 0.4% but below the previous month’s 1.1%, although that figure too was revised up substantially from 0.2%. 

EUR/GBP fell back to the bottom of its five-week range in the low 0.8300s, however, following the Bank of England (BoE) meeting despite the MPC voting by a clear majority of eight to one to lower the bank rate by 0.25% (25 basis points) to 4.75%, with one dissenter preferring them to remain unchanged. This was one more than voted to cut last time.

Lowering interest rates is usually negative for a currency as it reduces foreign capital inflows, however, in the case of the Pound Sterling (GBP) this was not the case on Thursday. Part of the reason may have been because the move was widely telegraphed, another because it remains well above the European Central Bank’s (ECB) comparable rate of 3.4% and the divergence favors the Pound. 

Yet another reason for GBP’s outperformance could be the BoE’s uncertainty regarding the outlook post the new government’s autumn Budget.

In the Budget, the government announced an estimated 70 billion (GBP) of increased spending as well as a rise in the minimum wage. This led economists at the Office of Budgetary Responsibility (OBR) to revise up their forecasts for inflation in the UK to 2.6% in 2025 from 1.1% previously. This, in turn, is expected to lead the BoE to keep interest rates relatively elevated next year, resulting in a stronger Pound. 

In his press conference after the decision, BoE Governor Andrew Bailey said the BoE would be keeping a close eye on inflation but that although he expected the decisions in the Budget to raise prices they would fall back down to target, and that confidence “allowed us to cut rates today”. 

At the same time, he added that he did not expect the projected path of interest rates to deviate much as a result of the Chancellor’s autumn statement. 

"I do not think it is right to conclude that the path of interest rates will be very different due to budget," said Bailey at the press conference.