The euro kept sliding against the British pound on Monday, stretching its nine-day losing run toward a cumulative drop of almost 1.6%. Sellers punched straight through the 0.8500 floor and dragged the pair down to the 0.8475 zone, with the 16-month trough of 0.8455 lurking just beneath. Then something unexpected happened: Paris threw the currency a lifeline. French 10-year OAT yields tumbled 17 basis points after right-wing heavyweight Marine Le Pen proposed slashing government spending by €1,400 over the coming five years. Le Pen, widely tipped to win next year's presidential race, gave investors a reason to exhale, and that flicker of confidence triggered a modest bounce in the euro. Don't mistake it for a turning point, though. Energy remains the dominant force, and it's working hard against the single currency. Iran-backed Houthi rebels carried out fresh strikes inside Saudi Arabia, lifting crude prices and pushing Brent back above the $100 threshold. For a bloc that imports most of its energy, that's a double blow: weaker growth and another inflation headache for the European Central Bank. Tellingly, upbeat German industrial figures barely moved the needle, a clear sign that traders are fixated on geopolitics and energy costs rather than domestic data. The euro's structural frailties haven't gone anywhere, and one political gesture from France won't undo a trend that's been building for well over a week. Until energy prices cool or the ECB signals a firmer response, rallies in EUR/GBP look more like selling opportunities than reasons to celebrate.
EUR/GBP is changing hands near 0.8480, and its alignment with the moving averages makes one thing clear: sellers still dictate the tempo on both timeframes. On the hourly chart, the 50-period average sits at 0.8475 while the 200-period average rests at 0.8520, leaving price roughly 5 pips above the shorter average but about 40 pips below the longer one. That wafer-thin cushion above the hourly 50-period average is the only thing preventing the near-term bias from turning outright bearish, and surrendering it would likely speed up the decline. Over on the four-hour chart, the 50-period average reads 0.8520, and the 200-period average sits at 0.8563, placing price about 40 pips beneath the shorter average and roughly 83 pips below the longer one. The standout detail here is that the hourly 200-period average and the four-hour 50-period average share the same value, 0.8520, fusing into a single, well-defended resistance band that now stands as the chart's defining hurdle. The nearest ceiling sits at 0.8500, a big round number that has repeatedly turned back rebounds. Above it, the 0.8520 confluence forms a tougher barrier, followed by 0.8540 and then 0.8563, the latter matching the four-hour 200-period average. Should buyers somehow regain real momentum, further targets appear at 0.8580 and 0.8600. On the downside, the first cushion rests at 0.8475, aligning with the hourly 50-period average. A break below would expose 0.8455, the 16-month low and a level that tends to attract buyers, then 0.8440, with 0.8420 marking a deeper demand zone where value hunters may step in. If the pair holds above 0.8475 and clears 0.8500, buyers could aim for the 0.8520 confluence and perhaps 0.8540 beyond it. But if selling pressure builds and 0.8475 gives way, a slide toward 0.8455 and 0.8440 becomes far more likely. The broader trend stays bearish as long as price remains under the four-hour averages. The next move really hinges on whether buyers can protect 0.8475, and how the market weighs Le Pen's fiscal proposal against the oil-driven strain building across the eurozone economy.
