EUR/GBP Sellers Push to Extend Downtrend Amid Market Uncertainty
Market Overview
The euro continues to weaken against the British pound as global trade tensions intensify following President Donald Trump’s imposition of tariffs on the United States’ three largest trading partners. The threat of similar tariffs on the European Union and the United Kingdom has triggered a sharp selloff in European equity markets, increasing pressure on the euro.
Despite these trade concerns, the UK’s strong service-based relationship with the US has provided some resilience for the British pound, allowing EUR/GBP to continue its downward trajectory. Investors are closely watching macroeconomic indicators to assess the potential impact of trade disruptions on both economies.
Technical Analysis
Trend and Momentum Outlook
On the 1-hour chart, EUR/GBP remains in a well-defined downtrend, encountering key support at 0.83142, which marks the last recorded low. If sellers maintain their momentum and push through this critical price level, further declines could target 0.83057, 0.82950, and 0.82831 in the coming sessions.
Technical indicators confirm strong bearish momentum. The RSI hovers near 30, signaling that the pair is approaching oversold conditions, though it has yet to show signs of a reversal. MACD histogram bars are extending further into negative territory, reflecting increased selling pressure, while the divergence between moving averages suggests that the downtrend remains firmly intact. Furthermore, Bollinger Bands are widening, reinforcing the strong bearish bias in the market.
If buyers attempt a reversal, they must reclaim 0.83261 to challenge the key resistance at 0.83453. A break above this level would invalidate the current bearish outlook, potentially shifting momentum in favor of the bulls.
Key Technical Levels
- Resistance Levels: 0.83261, 0.83453
- Support Levels: 0.83142, 0.83057, 0.82950, 0.82831
Fundamental Factors
Final Eurozone Manufacturing PMI (Monday) – A weaker-than-expected reading could reinforce the bearish sentiment for the euro.
Eurozone CPI Flash Estimate (Monday) – Analysts expect a 2.4% year-on-year increase in inflation, slightly above the ECB’s 2.0% target. However, continued economic pressures could keep the ECB on track for further rate cuts in 2025.
Conclusion
EUR/GBP sellers maintain control as the euro faces economic headwinds and policy divergence with the UK. A break below 0.83142 could drive further losses, while a rebound above 0.83261 would signal a shift in momentum.
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