• EUR/GBP consolidates losses around 0.8565, on track for a 0.7% weekly decline.
• Soft Eurozone inflation and dovish comments by the ECB's Lagarde have hammered the Euro this week.
• Upside attempts are likely to meet resistance at the 0.8600 area.

The Euro (EUR) remains stalled right above one-year lows against the British Pound (GBP) on Friday. The EUR/GBP pair licks its wounds around 0.8565, on track for a 0.7% weekly decline as the soft Inflation figures seen in the Eurozone earlier this week and comments from European Central Bank (ECB) president Lagarde have hammered the common currency.

Inflationary pressures cooled beyond expectations in June, according to the Harmonised Index of Consumer Prices (HICP) released on Wednesday, easing pressure on the ECB to hike rates again in July. ECB president Christine Lagarde observed more balanced risks for growth and inflation and denied second-round effects on inflation at the ECB’s central bankers’ meeting in Sintra, which is seen as a hint that the bank will hit the pause button in July.

Later on Friday, the final Eurozone HCOB Purchasing Managers Index (PMI) figures are expected to confirm that business activity contracted moderately in the services and manufacturing sectors. In the UK, the final S&P Global PMIs, also due on the day, will highly likely show a similar trend.

Technical Analysis: Upside attempts likely to be capped below 0.8600

EUR/GBP trades at 0.8567, keeping a bearish near-term tone following a four-day losing streak. The four-hour Relative Strength Index (14) hovers just above oversold territory, and the Moving Average Convergence Divergence (MACD) remains slightly negative, which suggests downside pressure is still in play even if the sell-off could start to lose momentum.

Price action highlights an "inside day," with bulls contained below Thursday's high of 0.8574 so far. Further up, the confluence between the 38.2% Fibonacci retracement of the last two weeks' sell-off with the June 24 and 30 lows, at the 0.8600 area, is likely to pose significant resistance.

On the downside, a break of Thursday's low of 0.8546 would resume the broader bearish cycle with the late June 2025 lows, at 0.8510, emerging as a plausible target. Below that level, there is no clear support until the early June 2025 lows, just above the 0.8400 level.

(The technical analysis of this story was written with the help of an AI tool.)