The euro (EUR) reversed course against the British pound (GBP) on Friday, pressured by geopolitical tensions and renewed tariff concerns, even as both the UK and Eurozone offered a light data calendar. At the time of writing, EUR/GBP trades at 0.8729, down 0.14%.
Geopolitics overshadow light economic dockets
The euro came under pressure after NATO warned Russia it is prepared to intercept aircraft, with Bloomberg reporting that European officials privately told Moscow they are ready to shoot down jets after viewing an incursion into Estonia as deliberate.
Meanwhile, the European Central Bank’s (ECB) Consumer Expectations Survey showed households see inflation at 2.8% over the next year, while 5-year expectations edged higher from 2.1% to 2.2%.
In the UK, a quiet docket left traders focused on Tuesday’s weak flash PMI readings, while attention is turning to the upcoming UK budget scheduled for November 26.
Tariffs add to pressure on euro
Broader sentiment also took a hit after US President Donald Trump announced sweeping tariffs, including 100% duties on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, 40% on upholstered furniture, and a 25% levy on heavy trucks. The measures risk adding fresh strain to Europe’s trade outlook.
Looking ahead
Next week, Eurozone releases include the Business Climate Index, Consumer Confidence, the Economic Sentiment Indicator, September inflation data, and multiple ECB speakers. Germany will also publish inflation and retail sales figures. In the UK, markets will be watching GDP data alongside speeches from Bank of England policymakers.
Technical outlook
EUR/GBP remains near weekly highs but is forming a “dark cloud cover” pattern, suggesting a potential retracement. The Relative Strength Index (RSI) is edging lower from bullish territory, signaling waning momentum.
A drop below 0.8700 would expose support at the 20-day SMA of 0.8686, followed by the 50-day SMA at 0.8671. On the upside, buyers reclaiming 0.8750 would target the 0.8800 resistance zone.
