The EUR/GBP currency pair traded choppily on Thursday, with the British Pound (GBP) modestly outperforming the Euro (EUR) following resilient UK economic data and ongoing political uncertainty in the United Kingdom. At the time of reporting, EUR/GBP was trading around 0.8659, having reached an intraday high of 0.8668 earlier in the session [1].
UK economic data showed that the economy expanded by 1.1% year-on-year in the first quarter of 2026, up from 1.0% in the previous quarter and surpassing market expectations of 0.8%. On a monthly basis, UK GDP rose by 0.3% in March, defying forecasts for a 0.2% contraction, though this was a slight slowdown from February’s 0.4% growth [1]. Despite the positive data, the GBP struggled to extend gains due to heightened political uncertainty. Speculation about potential leadership challenges to Prime Minister Keir Starmer intensified after Labour's weak performance in recent local elections, and UK Health Secretary Wes Streeting, considered a leading contender to replace Starmer, resigned from the government on Thursday [1].
Investor focus also remained on the monetary policy outlook for the European Central Bank (ECB) and the Bank of England (BoE), with traders now pricing in at least two interest rate hikes from both central banks by year-end. However, the Euro has not benefited from rising hawkish ECB expectations, as the Eurozone is seen as more vulnerable to the ongoing energy shock due to its heavier reliance on imported energy, raising concerns about slowing economic growth. This dynamic is keeping the near-term bias in EUR/GBP tilted to the downside [1].
From a technical perspective, EUR/GBP maintains a mildly bearish tone, trading below both the 50-day Simple Moving Average (SMA) at 0.8671 and the 200-day SMA at 0.8702. The pair is consolidating below these trend filters, suggesting that rallies remain constrained, while the Relative Strength Index (RSI) near 48 signals a neutral-to-soft stance and the Moving Average Convergence Divergence (MACD) reading hints at only tentative upside momentum. Resistance is seen at the 50-day SMA (0.8671) and the 200-day SMA (0.8702), with no clear support levels below the current spot, leaving the cross vulnerable to further downside [1].
CONCLUSION
EUR/GBP remains under pressure as robust UK economic data is offset by political uncertainty and a cautious market outlook. The pair's technical setup suggests limited upside potential while it trades below key moving averages, with risks skewed toward further weakness. Market participants are closely watching central bank policy signals and political developments for future direction.