EUR/GBP Price Forecast: Euro struggles as rebounds face resistance below 0.8400

• With the YTD low of 0.8361 just a few pips away, EUR/GBP slips back towards 0.8370.
• Euro bulls face headwinds from elevated oil prices and persistent worries over France's debt.
• Confirmation of a bullish correction would require the pair to move above 0.8400.

Elevated oil prices and lingering concerns over France’s fiscal position have weighed on the Euro (EUR), which has surrendered its earlier gains against the British Pound (GBP) on Tuesday. Following Monday's rejection around 0.8400, EUR/GBP is little changed just above 0.8370, within a short distance of its year-to-date low of 0.8361.

With several of the world's leading 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 possible increase in the coming months, with inflation still well above target.

Last week's robust Gross Domestic Product (GDP) data and elevated consumer inflation readings have left investors almost fully pricing in a 25-basis-point increase at next week's Bank of England (BoE) meeting in the UK.

According to analysts at ING, “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.” In its note, the bank adds that, 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,”

Technical Analysis: Bearish momentum fades as buyers remain on the sidelines

At 0.8375, EUR/GBP is consolidating its decline just a few pips above the year's lows. On the 4-hour charts, selling pressure appears to be easing: the Relative Strength Index (14) remains around 40, while the Moving Average Convergence Divergence (MACD) has moved into positive territory. Buyers, however, have yet to emerge.

A move through the 0.8400 region, 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 peaks near 0.8430 into focus. Beyond that, more substantial resistance awaits around 0.8480-0.8490, the area of the 8, 9 and 15 October highs.

The May 2025 low at 0.8355 provides the nearest support on the downside. A break beneath it could draw sellers towards the April 2025 trough of 0.8315.

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