On 13 August, the UK Office for National Statistics (ONS) reported that GDP growth slowed to 0.4% quarter‑on‑quarter in the second quarter, down from 0.6% in the first quarter. The figure matched expectations, and the market reaction was relatively muted.
The interest‑rate environment has remained largely unchanged for several weeks. On 30 July, the Bank of England held its policy rate at 3.75%, while the ECB kept its rate at 2.25% on 23 July. With both decisions already priced in, the lack of fresh guidance from either central bank means that short‑term EUR/GBP movement may be driven more by technical factors than by the latest macro data.
Technical Analysis of EUR/GBP
During the second half of July, EUR/GBP posted a strong advance, climbing from below 0.8460 to a peak near the current resistance level at 0.8586.
The rally was followed by a consolidation phase. Since the start of August, price action has narrowed into a pattern resembling a symmetrical triangle, with the trading range tightening progressively.
On Monday, 10 August, the pair slipped below the lower boundary of the triangle. EUR/GBP is now trading beneath both the triangle’s lower trendline and the lower boundary of the current market profile at 0.8553, while testing that level from below. If this retest holds and the downside move gathers momentum, the green support zone around 0.8533 could become increasingly important.
A false breakout, however, would shift focus back to the upside. In that case, the pair would encounter several technical barriers: the Point of Control (POC) at 0.8564, the upper boundary of the profile at 0.8580, and the key resistance level at 0.8586.
The RSI combined with moving averages currently reads 48, 40 and 43. The bearish signal has not intensified, and the RSI has moved back into neutral territory, indicating that momentum remains inconclusive.
Key Takeaways
The attempted downside breakout has pushed EUR/GBP outside the profile where the recent consolidation developed. The next directional move may hinge on whether the pound receives additional support from the Bank of England as the central bank shapes its subsequent policy course.
For now, the technical setup remains vulnerable to a false breakout, with the 0.8553 retest likely to be decisive in determining whether sellers can maintain control or the pair returns to the consolidation range.
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