EUR/GBP Price Forecast: Downtrend remains firm despite deeply oversold RSI

• EUR/GBP struggles near its lowest level since June 2025 as French fiscal risks weigh on sentiment.
• The pair remains below its 50-, 100- and 200-day SMAs, reinforcing the bearish outlook.
• Sellers target the 0.8400 psychological mark, although oversold conditions could limit further losses.

EUR/GBP reverses earlier gains on Tuesday as fiscal and political concerns in France limit the Euro’s (EUR) upside, while the technical picture also suggests sellers remain dominant. At the time of writing, the cross trades around 0.8445, near its lowest level since June 2025, after reaching an intraday high of 0.8457.

Pound support builds as EUR/GBP seen anchored in tight range despite UK budget risk

Analysts at ING have turned more constructive on the Pound, noting that they have "lowered our EUR/GBP forecast and now expect the pair to trade in a 0.84-0.85 range for at least several more months." They argue that "idiosyncratic risks surrounding the euro are unlikely to fade anytime soon," while the BoE "has sent a clear enough signal that it is prepared to hike," creating a supportive backdrop for GBP.

At the same time, ING flags the forthcoming "UK budget on 28 October" as "a potential risk for sterling, as markets are pricing in little fiscal concern." Even so, the bank points out that "Chancellor John Healey and Prime Minister Andy Burnham have appeared mindful of market sensitivities," and stresses that "while the budget will be closely scrutinised, we do not currently expect it to trigger significant bond volatility or leave a lasting negative mark on GBP."

Traders look ahead to the UK’s August Gross Domestic Product (GDP) report on Thursday, followed by the final Eurozone inflation reading for September on Friday. These releases, alongside comments from European Central Bank (ECB) and Bank of England (BoE) officials throughout the week, could trigger some price swings over the coming days.

Technical analysis

EUR/GBP has reversed sharply after testing 0.8600 in late September, slipping below the 50-day and 100-day Simple Moving Averages (SMAs). The 200-day SMA sits further overhead, reinforcing the bearish structure.

Momentum remains weak, with the Relative Strength Index (RSI) near 22 signalling deeply oversold conditions, while the Moving Average Convergence Divergence (MACD) remains in negative territory. The Average Directional Index (ADX) around 33 points to a strong prevailing downtrend, although oversold conditions leave room for a short-term recovery.

On the topside, initial resistance appears just above the market at the 0.8450 horizontal level, followed by a stronger barrier at 0.8500. Beyond these, the 50-day SMA at 0.8554 and the 100-day SMA at 0.8572 form a dense technical zone ahead of the 0.8600 horizontal line, with the 200-day SMA at 0.8626 marking a more strategic hurdle. On the downside, a further decline could bring the 0.8400 psychological mark into focus as the next support level.

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