FX.co ★ PipsHunter99 | EUR/GBP

Technical and Fundamental Analysis of the EUR/GBP Pair The EUR/GBP exchange rate moved lower toward the 0.8660 level during Thursday’s European session after disappointing German economic figures weakened investor confidence in the euro. The cross remains under moderate downside pressure while trading inside a broader corrective structure visible across higher timeframes. On the H4 chart, EUR/GBP continues to respect a gradual descending channel that has guided price movement over recent sessions. Despite the bearish tone, buyers have consistently defended the important 0.8650–0.8620 demand zone, where multiple historical swing lows converge. This region has become a strong accumulation area, repeatedly preventing sharper declines and indicating that market participants still view lower levels as attractive buying opportunities. The repeated rebounds from the 0.8650 support area also increase the probability of a developing double-bottom pattern, a formation often associated with trend stabilization and potential recovery if bullish confirmation emerges. On the upside, the pair faces a well-established resistance region between 0.8700 and 0.8730 on the H4 timeframe. This supply area aligns with previous reaction highs and the upper edge of the current descending channel, making it a significant technical barrier for bullish continuation. Several recent recovery attempts have stalled within this range, highlighting strong selling interest from larger market participants. A sustained breakout above 0.8730 would weaken the existing bearish structure and could trigger a broader upward correction. Until then, the pair remains technically vulnerable to renewed downside movement as sellers continue defending higher price zones. Short-term price action on the H1 timeframe reveals a more detailed view of current market positioning. Immediate intraday support is concentrated around 0.8655–0.8665, where the pair has repeatedly stabilized ahead of major macroeconomic releases and central bank announcements. This narrow zone currently acts as the first defensive layer for buyers attempting to prevent deeper losses. Meanwhile, short-term supply pressure is strengthening between 0.8680 and 0.8690, where multiple rejection candles and failed breakout attempts have formed during recent trading sessions. These repeated rejections indicate that bearish momentum remains active whenever the pair approaches intraday highs. The positioning of key moving averages also supports the cautious outlook. On the H4 chart, the 20-period Simple Moving Average (SMA) remains slightly below the 50-period SMA, a technical alignment that generally reflects mild bearish momentum. Price continues to fluctuate near or below these moving averages, causing them to act as dynamic resistance zones during corrective rallies. A decisive move above the 50-SMA could indicate weakening selling pressure and potentially shift the market toward a more neutral or even bullish short-term bias. On the H1 timeframe, the faster 20-SMA continues functioning as a short-term momentum indicator. When EUR/GBP trades above this moving average, intraday buyers may target the nearby 0.8680–0.8690 resistance area. However, a breakdown below both the 20-SMA and 50-SMA on the hourly chart would likely reinforce bearish momentum and expose deeper downside levels near 0.8620, where the broader H4 support structure becomes increasingly important. The euro came under pressure after weak German retail sales data highlighted ongoing concerns surrounding consumer demand in Europe’s largest economy. Official figures released by Destatis showed that German retail sales contracted 2.0% month-on-month in March, significantly worse than market forecasts. On an annual basis, sales also declined 2.0%, sharply missing expectations for moderate growth. Because retail sales are widely viewed as a key indicator of consumer confidence and domestic economic activity, the weaker-than-expected results triggered immediate selling pressure on the euro and raised concerns about the strength of the broader Eurozone recovery. Investor attention is now focused on upcoming German and Eurozone GDP figures, alongside highly anticipated policy announcements from both the European Central Bank (ECB) and the Bank of England (BoE). Financial markets broadly expect both central banks to leave interest rates unchanged in the near term as policymakers evaluate the economic consequences of heightened geopolitical tensions in the Middle East. However, rising energy prices linked to the Iran conflict continue to fuel inflation risks across Europe, increasing speculation that the ECB may adopt a more hawkish stance in the coming months. Many analysts now expect a 25-basis-point ECB rate increase in June, while market pricing increasingly reflects the possibility of additional tightening later this year.