empty
22.04.2025 11:52 AM
EUR/GBP. Analysis and Forecast

This image is no longer relevant

The EUR/GBP pair is losing ground today after two consecutive days of gains, trading near the psychological level of 0.8600.

The pound is receiving support from optimism surrounding ongoing trade negotiations between the United States and the United Kingdom. Following the introduction of new 10% tariffs by President Trump on British goods and 25% tariffs on auto, steel, and aluminum imports, UK Prime Minister Keir Starmer is attempting to secure a trade agreement with the US.

However, the EUR/GBP pair has been cushioned from a deeper decline by weaker-than-expected UK Consumer Price Index (CPI) data for March, which has increased expectations that the Bank of England may cut interest rates at its May meeting. Current market expectations point to a total of 86 basis points in rate cuts by the end of the year, with a fourth rate cut expected in December. Lower inflation could give the Bank of England more flexibility to support the economy amid rising household spending and persistent global trade tensions. This could, in turn, exert downward pressure on the pound.

Downside pressure on EUR/GBP is limited as the euro is strengthening, supported by broad US dollar weakness. Concerns over the Federal Reserve's independence have grown following comments by Trump and National Economic Council Director Kevin Hassett, who stated that Trump is still considering replacing Fed Chair Jerome Powell.

In terms of monetary policy, the European Central Bank recently cut its deposit rate by 25 basis points to 2.25%—its lowest level since early 2023—while also abandoning language describing its stance as "restrictive." Due to growing trade tensions, the ECB acknowledged a worsening economic outlook, and markets are now pricing in three additional rate cuts by year-end.

Technical Outlook: The bullish scenario remains intact, as oscillators on the daily chart remain firmly in positive territory and far from overbought conditions. A successful break above the key 0.8600 level and resistance at 0.8617 would open the way toward 0.8696, with a possible test of the monthly high.

On the other hand, the 0.85530 level remains the first major support. A break below it could lead to further declines toward 0.8520 and the psychological 0.8500 level, at which point bearish momentum may start to dominate.

Irina Yanina,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

The Euro Is Rushing Things

After a rapid rally from February through April, EUR/USD entered a prolonged consolidation phase. For several weeks now, the major currency pair has remained locked within the 1.1100–1.1400 trading range

Marek Petkovich 18:43 2025-05-28 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair has been recovering for the third consecutive day from this year's lowest level, supported by renewed buying interest in the U.S. dollar. Yesterday's optimistic U.S. economic data

Irina Yanina 11:44 2025-05-28 UTC+2

DXY: U.S. Dollar Index Continues to Show Positive Momentum for the Second Day in a Row

On Wednesday, the U.S. Dollar Index (DXY) continued its upward momentum for the second consecutive day, rebounding from the monthly low reached earlier this week. The index rose

Irina Yanina 11:36 2025-05-28 UTC+2

Why Are Currencies Traded Against the Dollar Not Declining? (There Is a Chance EUR/USD May Resume Growth and USD/JPY May Fall)

We are truly living in an unusual time, where the classic principles of assessing market situations are being cast aside in favor of more pressing and, more importantly, unclear

Pati Gani 10:05 2025-05-28 UTC+2

Market Conditions Favor the Dollar

Yesterday, the U.S. dollar continued to strengthen against a number of risk assets—particularly gaining ground against the euro and the British pound. Strong U.S. economic data triggered significant movements

Jakub Novak 09:53 2025-05-28 UTC+2

The Market Has Left the Bad Behind

History repeats itself. Markets breathed a sigh of relief and bought the decline in the S&P 500 after Donald Trump's threats of 50% tariffs on the European Union were replaced

Marek Petkovich 09:47 2025-05-28 UTC+2

AUD/NZD. Analysis and Forecast

The AUD/NZD pair attempted to attract buyers on the decline, but so far, there hasn't been enough conviction to support a sustained move. Intraday upward momentum slowed following the Reserve

Irina Yanina 09:33 2025-05-28 UTC+2

GBP/USD Overview – May 28: What Is Trump's Plan This Time? Part 2

The GBP/USD currency pair also traded with a minimal decline. There was little news on the day, so the market decided to take a breather before the next upward move

Paolo Greco 08:00 2025-05-28 UTC+2

EUR/USD Overview – May 28: What Is Trump's Plan This Time?

On Tuesday, the EUR/USD currency pair showed a slight decline. The U.S. dollar continues to struggle to gain strength as market participants lack confidence in it. While it was previously

Paolo Greco 08:00 2025-05-28 UTC+2

What to Pay Attention to on May 28? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Wednesday. Among the more or less noteworthy reports, only Germany's unemployment rate and the change in the number of unemployed can be highlighted

Paolo Greco 06:53 2025-05-28 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.