Geopolitical tensions and rising oil prices weigh on the Euro, pushing EUR/GBP to its lowest level in two weeks.
The Euro fell for a second straight session against the British Pound on Tuesday, trading below 0.8550 as cautious market sentiment dominated. The pair hit a two-week low of 0.8536 on Monday amid escalating geopolitical risks and climbing oil prices, with no major macroeconomic data from the UK or Eurozone to counter the pressure.
Strategists at Rabobank warned that the collapse of the US-Iran peace agreement introduces downside risks to Eurozone growth and upside inflation concerns. The region’s economy had previously absorbed higher energy costs and supply disruptions from the Strait of Hormuz closure, but renewed tensions may reverse that resilience.
Technical indicators reinforce the bearish outlook, with the 4-hour Relative Strength Index in the mid-30s and the MACD in negative territory. Support lies at 0.8530, with a break below targeting 0.8510, while a move above 0.8550 could shift focus back to 0.8566.