Below 0.8400: EUR/GBP Price Forecast as Euro stays weak and rallies remain capped

• 0.8370 is back in focus as EUR/GBP slips. The pair sits a few pips above its YTD low of 0.8361.
• Elevated oil prices and persistent worries over France's debt are keeping Euro buyers in check.
• A move above 0.8400 is needed to confirm a bullish correction in the pair.

EUR/GBP is little changed just above 0.8370. Following Monday's rejection around 0.8400, the pair remains close to its year-to-date low of 0.8361. The Euro (EUR) has surrendered earlier gains against the British Pound (GBP) on Tuesday as elevated oil prices and persistent concerns over France’s fiscal position weigh on the currency.

With several of the world's major central banks announcing 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 months ahead, with inflation still well above target.

Following last week's robust Gross Domestic Product (GDP) data and high consumer inflation readings, investors have almost fully priced in a 25-basis-point hike from the Bank of England (BoE), which meets next week.

According to ING analysts, “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: Selling Pressure Eases, but Buyers Stay Sidelined

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

To confirm a bullish response, buyers would need to clear the 0.8400 zone, marked by the October 21 and Monday highs. That would bring the October 19 and 20 peaks near 0.8430 into focus. Beyond those levels, stronger resistance awaits in the 0.8480-0.8490 zone, encompassing the October 8, 9 and 15 highs.

The May 2025 low at 0.8355 provides the nearest downside support. A break below it could 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.)