EUR/GBP Tests Trendline Support at 0.8555

The EUR/GBP exchange rate has been hovering around a crucial trendline support at 0.8555, as of March 7, 2025, with technical analysts closely monitoring its movement. A sustained break below this level could signal a shift in short-term momentum and potentially target the next psychological support near 0.8500.

The pair has been under pressure due to divergent monetary policy expectations between the European Central Bank (ECB) and the Bank of England, with the latter maintaining a relatively hawkish stance. This has kept the pound supported, while euro-area economic data, particularly in manufacturing, has remained soft, weighing on the single currency.

Momentum indicators such as the Relative Strength Index (RSI) are hovering near oversold territory, suggesting that selling pressure may be exhausting in the near term. However, the absence of a clear bullish reversal signal keeps the downside risk elevated.