The Euro rose above 0.8700 after the Pound fell due to UK inflation data that was lower than expected. In September, UK consumer prices showed a yearly CPI of 3.8%, which was below the forecast of 4%. This has led to growing expectations that the Bank of England might cut interest rates by the end of the year. The Euro-Pound currency pair is currently moving sideways and forming a triangle shape, indicating a bearish trend. It reached intra-day highs just under the resistance range of 0.8715-0.8730, with a target of 0.8750 for the year’s highest point. Support levels to watch are at the triangle’s bottom around 0.8670 and the lows from October at 0.8660. Additionally, we should keep an eye on the September and August lows situated at 0.8635 and 0.8610.

Currency Performance Overview

The table shows how the British Pound performed against major currencies today, highlighting it as the weakest compared to the Euro. The heat map visually displays these percentage changes, with the base currency on the left and the quote currency at the top. Guillermo Alcala, with degrees in Communication Sciences from two universities, has a background as a financial news editor and copywriter specializing in Forex. This week, the Euro is climbing against the Pound, testing the 0.8700 mark. This trend is driven by Sterling’s weakness following lower-than-expected UK inflation for September 2025. The market is reacting to the possibility of the Bank of England cutting interest rates sooner than anticipated. The latest data from the Office for National Statistics confirmed that the annual Consumer Price Index remained at 3.8%, missing the 4.0% forecast. As a result, the swaps market now indicates nearly a 60% probability of a rate cut during the BoE’s meeting in December 2025. This is in contrast to the European Central Bank, which is likely to keep rates steady as recent Eurostat data shows inflation in the Eurozone remains above its target. From a technical perspective, the EUR/GBP pair is consolidating within a triangle pattern, suggesting a continuation of the previous trend. Since early 2025, this trend has been downward, indicating that the next major movement could be a break lower. This consolidation has increased one-month implied volatility to 9.2%, signaling market expectations for a breakout.

Strategy and Technical Outlook

For traders anticipating this bearish scenario, buying EUR/GBP put options with strike prices near the triangle’s support levels at 0.8670 or 0.8660 may be a good strategy. If the price decisively breaks below this range, targets like the September 2025 low of 0.8635 could become relevant. This strategy allows traders to take a position for a stronger Pound while limiting their maximum risk. Given the mixed signals and choppy trading, some traders might prefer a non-directional strategy. A long straddle, which involves buying both a call and a put option at the same strike price, could benefit from significant price movements in either direction. This approach allows traders to capitalize on the expected breakout from the triangle without having to guess which way the market will lean—toward the BoE’s policy direction or the technical pattern. Traders should remain alert to the key resistance levels that are hindering the pair’s recent upward movement. A sustained breakout above the 0.8715-0.8730 range would challenge the current bearish outlook, possibly indicating that the market is more concerned about a slowdown in the UK economy than about interest rate policies. This could lead toward the year-to-date high of 0.8750. Create your live VT Markets account and start trading now.

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