EUR/GBP reversed from one-month highs at 0.8740 and found demand just above 0.8700 on Wednesday. On Thursday it trimmed losses and returned to the 0.8720 area, trading at 0.8724 at the time of writing.
The Euro held up better than the Pound in risk-off trading. Eurozone manufacturing data was positive on Wednesday, while UK factory data was weaker.
Near Term Technical Picture
On the 4-hour chart, the pair keeps a mildly bullish near-term bias, with the RSI above 60. The MACD has a bearish cross, which points to easing upside momentum.
Resistance sits at 0.8740 to 0.8750, with a 78.2% Fibonacci level at 0.8752. A break above would put 0.8790 back in view, with a further move exposing 0.8800 and then 0.8863.
Support levels include Wednesday’s low at 0.8704 and nearby support at 0.8705. Other downside markers are 0.8721 as a pivot if broken, the 38.2% retracement at 0.8680, and 0.8676 to 0.8677.
We remember looking at this pair around this time in 2025, when a bullish bias was forming above the 0.8700 handle. The prevailing view then was that stronger Eurozone data would help the cross push past resistance near 0.8750. That analysis proved to be a solid foundation for the trend that followed over the past year.
Fast forward to today, April 2, 2026, and the fundamental case for Euro strength over the Pound has only grown stronger. The latest flash estimates for March 2026 showed Eurozone inflation has cooled to a manageable 2.4%, whereas the UK’s CPI remains stickier at 2.8%. This divergence gives the European Central Bank more flexibility than the Bank of England, which is constrained by persistent price pressures.
This economic reality suggests derivative traders should be cautious about taking bearish positions on EUR/GBP. With the spot price currently holding firm around 0.8860, we are seeing increased demand for call options targeting the 0.9000 psychological level. Implied volatility remains low, making long-dated call spreads an attractive strategy to position for further upside at a reduced cost.
Macro And Positioning Outlook
Recent survey data further supports this outlook, as the March 2026 Eurozone Manufacturing PMI came in at 51.2, signaling continued expansion. In contrast, the UK’s most recent Services PMI dipped to 49.5, a worrying sign of contraction in its most critical economic sector. This underlying weakness suggests that any rallies in the Pound are unlikely to be sustained.
Therefore, we believe the path of least resistance remains upward for the foreseeable future. Any dips towards the 0.8800 level should be viewed as buying opportunities, perhaps by selling short-dated puts to collect premium and lower the entry point for a longer-term bullish stance. The key technical level from 2025 around 0.8790 should now act as a significant floor of support.
