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The EUR/GBP cross has faced prolonged selling pressure, dropping to its lowest levels since June last year. While high US Treasury yields have largely explained EUR/USD weakness, the persistent decline in EUR/GBP points to internal structural challenges within the Eurozone. France's ongoing fiscal uncertainties continue to weigh on European sovereign bond markets, driving market participants to price in idiosyncratic risks specific to the euro rather than just dollar strength.
From a technical perspective, the weekly chart reveals an increasingly bearish structure. A crucial neckline breakdown at 0.8620 in early July signaled early exhaustion, and a decisive break below 0.8500 threatens to open the door toward the 0.8300 handle. Although the July low near 0.8454 and the 61.8% Fibonacci retracement level at 0.8467 currently offer temporary support, short-term moving averages above 0.8485 and 0.8523 continue to cap upward momentum.
Looking ahead, traders should monitor whether key support between 0.8454 and 0.8467 can withstand the ongoing selling momentum. A sustained breakdown would confirm a deeper downtrend for the euro across multiple cross pairs. Conversely, a clear recovery above the 0.8500 resistance level and the 200-hour moving average would be required to neutralize short-term bearish pressure.
