FX.co ★ PipsHunter99 | EUR/GBP

Technical and Fundamental Analysis of the EUR/GBP Pair The euro (EUR) and British pound (GBP) remained under pressure on Monday, extending their declines for a fourth straight trading session. Disappointing German retail sales weighed on sentiment toward the euro, while an upward revision to the UK's second-quarter GDP provided some support for sterling. As a result, EUR/GBP slipped to a two-week low near 0.8560 and has declined around 0.4% so far this week. German retail sales data released on Monday offered little encouragement for euro buyers. Monthly retail sales fell 0.4% in August, although the decline was considerably smaller than July's 2.5% contraction. On an annual basis, retail sales rebounded by 1.3% after falling 3.4% in the previous month. However, the figure remained below the 2% increase expected by the market, highlighting continued weakness in German consumer demand. The UK, meanwhile, received a more supportive economic update. Britain's second-quarter GDP growth was revised upward to 0.5% from the previous estimate of 0.4%, while the annual growth rate was lifted to 1.4% from 1.2%. The UK's National Statistics Office also reported that the current-account deficit narrowed to 199.32 million in the second quarter, while the first-quarter figure was revised to 211.2 million. The market had expected the deficit to widen toward 256 million. The euro also continues to face broader pressure from concerns surrounding France's fiscal position and political uncertainty. At the same time, the decline in Brent crude from a quarterly high around $101 to below $96 has provided some relief for Europe's energy import costs. However, elevated French borrowing costs remain a major obstacle for a sustained recovery in the euro. France's public debt and fiscal concerns remain an important source of uncertainty for the broader European currency. French government debt has climbed to exceptionally high levels, while ongoing political deadlock has made it difficult to establish a convincing fiscal consolidation strategy. The spread between French and German government bond yields has widened to around 115 basis points, its highest level since 2012, reinforcing concerns about renewed stress within European bond markets. EUR/GBP is trading near 0.8545 and is currently testing an important H4 demand area between 0.8535 and 0.8550. This region has previously attracted buyers and helped limit deeper declines. It also corresponds with recent structural lows, making it a key area to monitor for potential bullish rejection or stabilization. On the H1 chart, another short-term demand zone can be found around 0.8540–0.8555. Buyers have attempted to defend this area during recent sessions, although the overall momentum remains weak. A sustained hold above this zone would be needed to improve the near-term technical picture. The 20-period and 50-period SMAs on both the H4 and H1 charts remain above current price action. Both averages are gradually turning lower and are concentrated roughly between 0.8565 and 0.8585, creating a series of dynamic resistance levels. With EUR/GBP trading below these moving averages, the short-term structure continues to favor sellers. Initial resistance is positioned around 0.8570–0.8580, an area that previously acted as a consolidation and reaction zone. Above that, stronger supply is located near 0.8590–0.8605, where previous selling pressure and failed breakout attempts have created a more significant barrier. A sustained defense of the 0.8535–0.8550 demand zone, followed by a decisive move back above the 20 SMA, could allow EUR/GBP to recover toward the 50 SMA and potentially the lower boundary of the 0.8590–0.8605 supply zone. On the downside, however, a clean break below 0.8535 would weaken the demand structure and expose the next support region around 0.8510–0.8520, keeping the broader bearish pressure intact.