EUR/GBP just bounced off a key support zone, which could mean the pair stays longer inside a long-term range.
Will we see more euro gains in the next few trading sessions?
Let’s take a closer look at EUR/GBP’s daily chart!
EUR/GBP: Daily
EUR/GBP Daily Forex Chart Faster With TradingView
In case you missed it, European Central Bank (ECB) Board Member Isabel Schnabel recently gave a hawkish signal, saying a June rate hike is “needed” because “looking through” the persistence of the inflation shock is “no longer an option.” That kind of clear policy bias could keep EUR demand supported against the other major currencies.
But the British pound may still give the common currency a run for its money (heh). Sterling was last week’s strongest major currency, as traders leaned into better risk sentiment and hawkish inflation remarks from Bank of England (BOE) officials, instead of dwelling on misses in the U.K.’s retail sales, services PMI, labor market, and inflation reports.
The monetary policy tug-o-pips is showing up in EUR/GBP’s range, which still looks pretty solid despite EUR’s recent slide.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/GBP printed a bullish engulfing candlestick around the .8620 area, which could draw bullish demand since the level lines up with the bottom of a range that’s been holding for all of 2026.
Watch for more bullish candlesticks, as these could take EUR/GBP back up to the .8680 mid-range level or even the .8750 range resistance zone.
But if this week’s headlines bring more demand for the pound, EUR/GBP could still break lower and head for nearby inflection points like the S1 (.8583) Pivot Point line or the .8550 minor psychological handle.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
This article touches on ECB and BOE policy divergence, and if terms like “hawkish” and “dovish” aren’t fully clear yet, Premium members can read our lesson:
📖 Hawkish vs. Dovish: How to Read Central Bank Language
Reading this helps you understand what hawkish and dovish signals actually mean, how to identify where a central bank sits on the policy spectrum, and why a single statement can move a currency pair more than a rate decision itself.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but the central bank dynamics and policy signals driving the move.
