• EUR/GBP bounces up from lows sub 0.8620, but remains capped below 0.8640.
• Hawkish comments by ECB's Lane have failed to support the Euro.
• In the UK, fading expectations of BoE hikes are weighing on GBP rallies.

The Euro (EUR) is trading higher against the British Pound (GBP) on Tuesday, trimming losses after depreciating more than 1% in a bit more than a week. Euro bulls, however, remain capped below the 0.8640 area so far, which leaves the pair trading within Monday’s range, and keeps its broader bearish trend intact.

Hawkish comments by European Central Bank (ECB) Chief Economist Philippe Lane, who endorsed market expectations of upcoming rate hikes earlier on Tuesday, have failed to provide any significant support to the Euro. 

The Pound, on the other hand, remains fairly resilient to the UK’s uncertain political scenario, although the low yield on UK Gilts amid fading hopes of Bank of England (BoE) monetary tightening, as well as a somewhat more cautious market, are keeping Cable’s upside attempts limited.

Technical Analysis: Euro bears remain in control

EUR/GBP trades at 0.8634, with the near-term bearish structure still in place and momentum indicators pointing to moderate bearish pressure. The Relative Strength Index (RSI) has bounced up from oversold levels, but remains within negative territory. The Moving Average Convergence Divergence (MACD) has inched back into positive territory, yet hints at a consolidative, neutral bias, rather than at a trend shift.

Initial resistance lies at a previous support in the 0.8640 area (May 21 low). Further up, the May 20 and May 19 highs, near 0.8665, and the 0.8685 area, respectively, emerge as the next bullish targets.

On the downside, a break below 2026 lows between 0.8605 and 0.8615 would bring the August 2025 low, at the 0.8600 area, and the 127.2% Fibonacci extension of the May selloff, at 0.8587, into focus.

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