GBP/EUR Technical Breakdown Sept 22 2025

The British pound is trading just above 1.1450 against the euro, finding some stability after last week’s drop to 1.1413, its weakest level since July. The recovery eases immediate downside pressure, but with fiscal concerns weighing on sterling and the Bank of England maintaining a cautious stance, the balance of risks still favours euro strength in the weeks ahead.

GBP/EUR remains below all major moving averages, but the recovery from 1.1413 signals that support around 1.1450 is holding for now. Resistance is clustered at 1.1535-1.1550, while 1.1410 remains the key downside level to watch.

Sterling’s decline last week was driven by a mix of euro buying, dovish BoE policy guidance, and fresh fiscal concerns. UK public sector net borrowing surged to nearly £18bn in August, far above the £12.5bn forecast, reigniting worries ahead of November’s Autumn Budget. Rising gilt yields and debt concerns have added to the pressure.

At its September meeting, the BoE left rates unchanged at 4% in a 7-2 vote, slowed quantitative tightening to £70bn, and signalled a cautious path forward. While markets see the next cut in 2026, investors still view the BoE as behind the ECB, which is seen as nearing the end of its easing cycle. This divergence continues to weigh on sterling.

Still, the rebound from 1.1413 shows markets are not in freefall. Short-term oversold conditions and a lighter UK data calendar this week have allowed GBP/EUR to stabilise above 1.1450, at least for now.

The highlight is Tuesday’s PMI data. Eurozone composite PMI is expected at 51.1, while UK services PMI is projected at 53.6. Any miss in UK services would pressure sterling, given the sector’s importance to growth.

Other key Eurozone releases include the German IFO survey (Wednesday) and final Q2 GDP (Friday). Stronger data would reinforce euro demand. With the UK calendar relatively light aside from BoE speeches, GBP/EUR direction will mainly follow euro developments.

The base case is for GBP/EUR to consolidate between 1.1450 and 1.1535 in the short term, with risks tilted toward the downside if euro data beats expectations.

Tactically, rallies into the 1.1500-1.1535 zone remain selling opportunities, while a sustained move below 1.1450 would re-expose 1.1410 and 1.1380.

GBP/EUR has steadied after last week’s slide to 1.1413, but sterling remains under pressure from fiscal concerns and cautious BoE policy. The euro looks steadier as the ECB nears the end of its easing cycle. Unless UK data delivers a surprise, the path of least resistance is still lower, but for now, 1.1450 is acting as a key pivot holding the market in balance.