EUR/GBP traded around 0.8800 on Tuesday, up 0.40% on the day, as weakness in the Pound Sterling (GBP) continued ahead of Thursday’s Bank of England (BoE) policy meeting.
Markets largely expect the BoE to keep its benchmark rate unchanged at 4.0%, though roughly one in three investors still anticipate a 25-basis-point cut following softer UK inflation data, according to Reuters.
UK Chancellor Rachel Reeves acknowledged that “inflation has been too slow to come down,” noting that her upcoming budget would focus on measures to bring price growth under control.
On the Euro (EUR) side, attention turns to European Central Bank (ECB) President Christine Lagarde’s speech later in the day, although no major policy signals are expected.
Political tensions in France—after lawmakers rejected a proposed wealth tax have added a layer of uncertainty for the Eurozone outlook. However, the BoE decision remains the primary short-term driver for the pair.
EUR/GBP technical outlook: uptrend capped by 0.8818 resistance
From a technical perspective, EUR/GBP failed to sustain momentum above the 0.8818 resistance level and has since slipped below an ascending support line on the 4-hour chart, which now acts as resistance near 0.8805. A rebound above this barrier could open the door for another test of 0.8818, and a confirmed breakout would likely trigger renewed bullish momentum.
On the downside, initial support is seen at 0.8790. A break below this level could expose the recent lows near 0.8763, with further weakness targeting the 100-period Simple Moving Average (SMA) around 0.8730. Despite short-term consolidation, the upward-sloping SMA and a Relative Strength Index (RSI) hovering near 61 indicate that the broader bias remains positive.
Broader trend outlook
On the weekly chart, EUR/GBP continues to trade within a wide range between 0.8200 and 0.9300, a pattern in place since mid-2016.
The pair rebounded from the lower boundary in February and is now consolidating near the midpoint of this range, supported by a long-term ascending trendline.
Sustained momentum could pave the way for a medium-term advance toward 0.9300, although the weekly RSI nearing overbought levels around 70 suggests potential consolidation or a pullback before further gains.
