EUR/GBP Price Forecast: Narrow trading range persists after five straight weeks of losses

• EUR/GBP remains little changed, with the Pound unable to draw sustained support from the BoE's hawkish rate increase.
• Trading beneath the key daily SMAs leaves the cross's broader bearish outlook unchanged.
• An elevated ADX indicates a powerful downtrend, even as the RSI points to oversold territory.

Selling pressure appears to be easing in EUR/GBP on Friday, with the cross little changed within this week's narrow trading band. The muted trading suggests a pause for bears following five straight weekly declines that left the pair oversold. At the time of writing, the cross is changing hands around 0.8339, close to levels previously seen in April 2025.

Markets showed little response to Thursday's Bank of England (BoE) rate increase of 25 basis points to 4%, despite policymakers indicating that additional tightening may be required to rein in inflation. The Pound nevertheless continues to find support against the Euro (EUR) from worries about France's fiscal outlook.

Why is the Pound struggling to retain gains after the hawkish BoE decision?

The limited benefit to Sterling was highlighted by Commerzbank analysts, who observe that “despite this rather hawkish decision, the Pound only benefited briefly and had to give up its gains as the day progressed.” While conceding that “at first glance, this may seem confusing,” they explain that “expectations ahead of the meeting were quite ambitious, with almost three further rate rises priced in by the middle of next year.” Markets also had little basis for pricing a clearer policy trajectory because Governor Andrew Bailey “gave no indication of the timetable following the next rate rise,” according to the analysts.

On the timing of further tightening, Commerzbank emphasises that “we remain firmly of the view that the BoE will not deliver a second interest rate rise until February rather than in December, as this would contradict its cautious approach to date.” The analysts also note that “if the situation in the Middle East has stabilised by then and energy exports have normalised, the case for further interest rate hikes will be weaker.” Their assessment is that “until then, the Pound is likely to struggle to trade any higher.”

What does the technical analysis suggest for EUR/GBP?

A position below the 50-, 100- and 200-day Simple Moving Averages (SMAs) keeps EUR/GBP's near-term daily chart outlook bearish. These averages are grouped between approximately 0.8489 and 0.8599.

Oversold readings persist in the Relative Strength Index (RSI), which is hovering around 24. Meanwhile, the Moving Average Convergence Divergence (MACD) has edged just above zero but remains very shallow, suggesting that bearish momentum is strong without gathering pace. This is consistent with an elevated Average Directional Index near 50, indicating an established downtrend.

Any recovery would first face resistance at 0.8350, with 0.8400 and 0.8450 the next barriers. Further up, the 50-day SMA at 0.8489, the 100-day SMA at 0.8523 and the 200-day SMA at 0.8599 would pose additional obstacles.

The recent low near 0.8330 provides the nearest support. Should selling pressure return, a more extended decline would bring the next horizontal level at 0.8300 into focus.

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