EUR/GBP Price Forecast: Can the pair sustain consolidation above 0.8350 after rejection at 0.8370?

• Gains in EUR/GBP remain capped below 0.8370 as the pair holds on to higher levels.
• The Euro finds some backing as Oil prices fall 20%.
• The Pound has found no support despite positive UK GDP and Industrial Production figures.

A modestly firmer Euro (EUR) is consolidating against the British Pound (GBP) this week as lower Oil prices lend support, though the broader trend continues to limit gains. Following last week's rebound from lows of 0.8320, EUR/GBP has established support above 0.8350. Advances, however, have so far stalled below 0.8370. 

Some of the support for the common currency comes from cheaper Oil, which offers relief to Eurozone economies. After falling about 20% from last week's highs, Brent Oil has spent the past few days hovering just above $90, its lowest level since early September.

The Pound's response to the UK macroeconomic releases has nevertheless been muted. Gross Domestic Product (GDP) rose 0.7% in the third quarter and 1.9% on a yearly basis, both in line with expectations, while growth in Industrial Production and services output exceeded forecasts.

With few releases on the Euro Area calendar on Thursday, attention will centre on European Central Bank (ECB) President Christine Lagarde’s remarks at an economic event in Paris late in the US session. Her comments are unlikely, however, to alter market expectations for a 25 basis points interest rate increase at the bank's next meeting on 17 December.

Technical Analysis: Can the Euro extend its correction within the broader bearish trend?

Trading at 0.8358, EUR/GBP retains a largely neutral near-term bias, although the broader downtrend remains in place following a fall of more than 3% in October. Signals from momentum indicators on the 4-hour charts are mixed. While the Relative Strength Index (14) remains above its 50 midline, the Moving Average Convergence Divergence (MACD) has edged into negative territory, leaving no clear directional bias overall.

For bulls, a break above Wednesday's high of 0.8370 and the 28 October high near 0.8380 would open the way towards the 26 October high around 0.8400. Conversely, renewed selling below Wednesday's low of 0.8350 would put the lows of 6 and 9 November, near 0.8335, back in focus.

(An AI tool assisted in writing this story's technical analysis. Learn more.)