EUR/GBP is stable at around 0.8675 after failing to reach 0.8690. Mixed economic data from Germany has not supported the Euro. This has led to a predicted weekly decline of 0.3% and a 1.5% drop since mid-November. The industrial production report for Germany in November shows a 0.8% increase, which is better than the expected 0.4% decline, but below the 2% rise seen in October. Germany’s trade surplus decreased to €13.1 billion, down from €16.9 billion in October, missing the expected €16.5 billion.

Germany’s Economic Outlook

Exports fell by 2.5%, contrary to expectations for no change, raising worries about Germany’s economic future. Eurozone retail sales are expected to rise by 0.1% in November, with annual growth projected to increase to 1.6%, up from 1.5% in October. In the UK, there are few economic updates this week. The Pound faces pressure due to a revised S&P Global Services PMI, which raises concerns about economic growth amid high inflation. This situation complicates the Bank of England’s efforts and helps keep EUR/GBP stable. The EUR/GBP pair shows weakness, stalling at 0.8675 after failing to break the 0.8690 resistance level. This continues the downward trend since the pair declined from its mid-November 2025 highs. The decline is partly due to recent data showing UK inflation in December 2025 remained high at 4.1%, while Eurozone inflation dropped to 2.9%, making the Pound more appealing. Today’s German data presents significant challenges for the Euro. Although industrial production surprised with an increase, the sharp 2.5% drop in exports for November 2025 raises major concerns about the Eurozone’s economy. This new data strengthens bearish sentiment and suggests the possibility of further declines in the pair in the coming weeks.

UK Economic Challenges

However, the Pound is facing its own issues, which is why the pair hasn’t dropped significantly. A recent downward revision to the UK Services PMI in early January 2026 indicates slowing growth, creating a challenging stagflation environment for the Bank of England. Interest rate markets are now predicting a greater than 50% chance of a rate cut by mid-year to support the struggling economy. With both economies weakening, it may be wise to consider options to express a view on the pair’s direction. Buying put options on EUR/GBP could be a smart move to profit from a continued decline driven by concerns about the German economy while limiting upside risk. The 0.8690 level is now a key resistance point to watch for potential short position entries or strike prices. Create your live VT Markets account and start trading now.

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