• EUR/GBP consolidates near 0.8630 after retreating from last Friday's highs above 0.8680.
• Fresh hostilities in the Middle East and higher Oil prices are likely to weigh on the Euro.
• UK and Eurozone Services PMI are expected to confirm weak business activity in May.

The Euro (EUR) is practically flat against the British Pound (GBP) on Wednesday, trading a few pips above 0.8630 at the time of writing after retreating from last Friday’s high of 0.8681. The risk-off mood amid the escalating tensions in the Middle East has been weighing on the pair this week, while the hot eurozone inflation figures released on Tuesday failed to provide any significant support.

Iran and the US exchanged attacks on Wednesday, casting further shadow on an already fragile ceasefire and sending Oil prices higher, which is likely to keep Euro rallies limited.

On the macroeconomic front, the final HCOB Services Purchasing Managers’ Index (PMI) figures from the Eurozone and key members are expected to confirm sluggish activity in May. In the UK, the S&P Global PMI, also due on Wednesday, is likely to show a similar picture.

Technical Analysis: Euro rallies keep finding sellers

EUR/GBP has found support just above 0.8630, but it remains unable to perform any significant recovery. Momentum indicators in 4-hour charts remain bearish, with the Relative Strength Index (RSI) around 39 and the Moving Average Convergence Divergence (MACD) showing slightly negative levels, all in all suggesting that upside attempts could struggle.

Further depreciation below the session highs near 0.8630 would expose the 2026 lows in the 0.8610-0.8615 area, where the pair is expected to find significant support.

On the topside, initial resistance sits at Tuesday's high of 0.8641, which is closing the path towards the mentioned Friday's top, at 0.8681.

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