Technical Snapshot: EUR/GBP Stalls in Consolidation Phase

March 25, 2025

This week, the EUR/GBP currency pair has moved sideways, reflecting indecision among traders amid increasing macroeconomic uncertainty. Technically speaking, the pair is hovering near its 20-day Simple Moving Average (SMA)—a key resistance level—suggesting that the market is awaiting a clear directional trigger.

Current Support Levels: 0.8330, 0.8315, 0.8300
Current Resistance Levels: 0.8350, 0.8370, 0.8400
RSI Reading: 45 (neutral-bearish)
MACD: Trending downward, indicating fading bullish momentum

Despite minor fluctuations, no breakout above the SMA has occurred, signaling a likely continuation of this consolidation pattern unless a catalyst shifts sentiment.

Macro Drivers: Diverging Policies in the Eurozone and UK

At its March policy meeting, the European Central Bank (ECB) made a notable move by cutting interest rates for the sixth time since June 2024. This dovish stance reflects growing concerns over the economic impact of new U.S. tariffs, which are expected to disrupt trade and spur inflation in the Eurozone.

ECB policymakers are walking a fine line: supporting growth while managing inflation risk. Their latest minutes indicate readiness for further policy easing if conditions worsen, which could weigh on the euro in coming weeks.

UK Holds Fire But Faces Recession Risk

Across the Channel, the UK economy is under pressure. Analysts warn of a potential recession following the U.S.’s introduction of a universal 10% tariff, which threatens to hit British exports and erode already fragile consumer confidence.

While the EU is preparing retaliatory measures, the UK government has adopted a more cautious stance, hoping to preserve leverage in future trade negotiations. However, with growth forecasts slashed to zero for the next 12 months, pressure is mounting on the Bank of England to act.

What This Means for Traders

For forex traders, the EUR/GBP pair currently lacks directional conviction, with both fundamental and technical indicators offering mixed signals. The market is caught between:

A dovish ECB, increasing euro downside risk
A recession-threatened UK, limiting pound strength
A tight technical range, signaling potential for a breakout once macro clarity improves

If you’re trading EUR/GBP, this is a time to watch for breakout confirmation, keep an eye on central bank commentary, and track geopolitical developments around trade.

Final Thoughts

The EUR/GBP remains one of the more interesting pairs to monitor in Q2 2025. While short-term action is muted, underlying macro shifts and central bank divergence could soon pave the way for a decisive move.

LOGIN