Current dynamics

The EUR/GBP pair is trading within a long-term downtrend, having entered a sideways range of 0.8361–0.8270 (Murray levels [2/8]–[–1/8]) in November amid uncertainty about further actions by European and British regulators.

Currently, the economic situation of both countries seems similar: business activity is slowing down in all key sectors. Thus, in November, the composite business activity index in the UK fell to 49.9 points, and in the eurozone to 48.1 points as a result of fears of the start of “trade wars” after Donald Trump’s return to the White House. Additional pressure on British business is exerted by the state budget presented by the Labor government, which provides for a significant increase in taxes for enterprises. Inflationary pressure is also increasing, however, the consumer price index in the eurozone reached 2.0%, but met the target of the European Central Bank (ECB), and in the UK it was 2.3%, exceeding the levels required by the Bank of England.

In these conditions, the further steps of both regulators look uncertain, but most experts expect that both European and British officials will continue to gradually ease monetary policy, although its pace will be more significant in the eurozone. Analysts expect that the Bank of England will adjust the interest rate once a quarter in 2025, and in general over the year it will decrease by 100 basis points, and the ECB - by 150 basis points, which in the medium term will contribute to a further decline in the EUR/GBP pair.

Support and resistance levels

The trading instrument is close to the 0.8300 mark (Murray level [0/8]), consolidation below which will allow it to reach the target of 0.8239 (Murray level [–2/8]). In case of overcoming the 0.8361 mark (Murray level [2/8]), growth is expected to resume in the area of 0.8422 (Murray level [4/8]) and 0.8483 (Murray level [6/8]).

Technical indicators do not give a single signal: Bollinger Bands have moved horizontally, Stochastic is directed upward, and the MACD histogram is stable in the negative zone.

Resistance levels: 0.8361, 0.8422, 0.8483.

Support levels: 0.8300, 0.8239.

Trading scenarios

Short positions can be opened below the level of 0.8300 with a target of 0.8239 and a stop-loss of 0.8340. Implementation period: 5-7 days.

Long positions can be opened above the level of 0.8361 with targets at 0.8422, 0.8483 and stop loss at 0.8320.