EUR/GBP is turning lower from a long-term trend resistance area!

Are the bears ready to turn the tides in their favor?

Let’s discuss what’s up on the daily chart:

EUR/GBP Daily Forex Chart by TradingView

EUR/GBP kicked off the year strong, climbing from the .8300 psychological handle to its current levels near .8400, as traders grew more optimistic about the Euro Area’s mixed economic data releases.

Meanwhile, Sterling traders had their hands full with concerns over the U.K.’s fiscal health and chatter about a potential Bank of England (BOE) rate cut.

But that was earlier in the year.

Now, dovish comments from European Central Bank (ECB) members, the Euro Area’s vulnerability to a potential trade war with the U.S., and sticky high wage growth in the U.K. are giving EUR/GBP buyers second thoughts.

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!

The buyers’ hesitation is likely why EUR/GBP is struggling to break above its January highs near .8450.

To make things trickier, .8450 lines up with a confluence of technical resistance levels: a long-term descending channel, the daily chart’s 200 SMA, and the 61.8% Fibonacci retracement of the most recent downswing.

If more bearish candlesticks show up, we could see EUR/GBP sellers aiming for previous inflection points like the .8300 psychological handle or even the .8225 lows.

Still, we can’t rule out another leg higher. If the ECB surprises markets with a “hawkish cut” or if Trump eases up on tariff threats against the Euro Area, EUR/GBP could extend its 2025 uptrend.

Whichever scenario plays out, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!