EURGBP Analysis

Introduction

The EUR/GBP reflects the economic relationship between the Eurozone and the United Kingdom. This pair is influenced by economic data from both regions, including GDP, inflation, and employment figures. The Bank of England’s and European Central Bank’s interest rate policies play significant roles in driving the pair’s movements. Brexit-related news and the economic outlook for the UK significantly impact the EUR/GBP.

Fundamentals and Interest Rates

The European Central Bank policy is Dovish with the (ECB) current Interest rate 2.9%. Latest change was Jan 30, 2025 (-25bp)%.
On that side the Bank of England policy is Dovish and (BOE) has set its interest rate to 4.5% by latest change, Feb 06, 2025 (-25bp).
(BOE) Higher interest rates generally lead to higher returns on investments denominated in GBP. This tends to attract foreign capital into GBP assets.

Based on the economic and macro fundamental data, The Fundamental Bias of EUR is Moderate Bearish and for the GBP is Moderate Bearish.
Ziwox considering Neutral bias for this asset and we predict side movement in the long-term.
Our Ziwox A, mid-term Fundamental Score for EUR is -1. and Fundamental Score for GBP is 4. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "Sydney & Tokyo", Market risk sentiment is Strong Risk-OFF. The Gold and United States Dollar recorded the strongest performance, while the Canadian Dollar and Australian dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a 0.07% increase against us dollar.
Euro "EUR", performance has been -0.05% down so far
Pond "GBP", performance has been -0.06% down as of now
Australian dollar "AUD", has dropped by -0.1%
New Zealand dollar "NZD", has dropped by -0.08%
Japanese YEN "JPY", experienced -0.03% fall
Swiss franc "CHF", experienced -0.09% fall so far
Canadian dollar "CAD", has lost -0.14%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.

Market Sentiment and Positioning

EUR COT (Commitment of Traders):

Institutions Net Position on >Euro is -64425 included 165594 long, 230019 short and -5811 position changed from last week.
So they mainly have a bearish view on this asset and sold EUR for lower prices in long-term.
Last week -5811 repositioning Indicates more sell positions and price pressure in short-term.

GBP COT (Commitment of Traders):

Institutions Net Position on >British Pound is -3168 included 69087 long, 72255 short and 8155 position changed from last week.
So they mainly have a bearish view on this asset and sold GBP for lower prices in long-term.
Last week 8155 repositioning Indicates closed positions and short-term profit-taking.

Retail Traders:

Crowd traders or Retail traders are bullish on the EURGBP with 76% 24% ratio. 9157 long pos and 2849 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability EURGBP prices may decrease.

Technical Levels and Support/Resistance

The EURGBP pair is approaching a critical technical support level near 0.82918.
Technical trend is Sell, So If the pair continues to weaken, this support could become a significant area to watch for potential reversal or consolidation.
On the upside, there is key resistance near 0.83783. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.