The Euro (EUR) fell against the British Pound (GBP) because of geopolitical tensions and a light economic schedule in both Europe and the UK. At that moment, EUR/GBP was trading at 0.8729, which is a drop of 0.14%. Geopolitical issues have been a major factor for the Euro. NATO is ready to intercept Russian aircraft following reports that Russia intentionally entered Estonia’s airspace. Meanwhile, the European Central Bank (ECB) released a Consumer Expectations Survey. It showed that households expect inflation to be 2.8% in one year and to rise from 2.1% to 2.2% over the next five years.

Economic Data And Market Expectations

In the UK, the absence of economic data has led traders to focus on disappointing Flash PMI figures. Markets are also looking forward to UK budget details set to be revealed on November 26. New tariffs imposed by US President Donald Trump, which place duties of 25% to 100% on various imports, could further impact Europe. Next week’s European schedule includes reports on Business Climate, Consumer Confidence, and multiple events with ECB speakers. We can also expect UK Gross Domestic Product (GDP) figures and speeches from the Bank of England. Currently, EUR/GBP is trading near weekly highs and technical analysis suggests support at 0.8686 and resistance at 0.8800. The Euro appears to be weakening due to ongoing geopolitical stresses, reminiscent of the NATO-Russia tensions over Estonia in late 2024. Russian naval exercises in the Baltic are causing similar concerns, placing pressure on the Euro. Given that NATO has intercepted hundreds of Russian aircraft each year recently, traders should stay cautious of any sudden escalations that could affect the Euro. Additionally, we are mindful of trade tariff threats from the United States that emerged towards the end of 2024. While the specific products may have changed, the risk of protectionist measures from Washington remains a significant concern that could undermine European sentiment and exports. Historically, after the 2018 tariffs were implemented, Eurostat reported significant impacts on affected industrial goods, making new tariff discussions a serious risk.

Monetary And Technical Analysis

Monetarily, the ECB continues to confront persistent inflation pressures, similar to what was seen over a year ago. Eurozone inflation for August 2025 stood at 2.9%, adding pressure on the ECB and restricting its capacity to support economic growth. In the UK, the most recent quarterly GDP showed only a 0.2% growth rate, confirming the weak economic outlook that traders have been anxious about. Technically, EUR/GBP displays signs of weakness, similar to the ‘dark cloud cover’ pattern that predicted a downturn in late 2024. With the currency pair struggling to maintain important support levels, we might witness another downward movement. Derivative traders should consider positioning for further declines, possibly by looking into put options on the Euro to protect against a drop below the 0.8600 level in the coming weeks. Create your live VT Markets account and start trading now.

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