The euro has been locked in a losing battle with the British pound, repeatedly failing to clear a key technical hurdle — and the chart suggests the struggle may not be over yet.
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Since hitting a peak of 0.8729 on May 15, the euro has repeatedly tried — and failed — to push through an important price level known as the 100-day moving average, currently sitting at 0.8671, according to data supplied by LSEG.
Think of this average as a kind of referee's line drawn across the middle of the field. It represents the average price of the euro against the pound over the last 100 trading days, and it helps reveal the broader trend beneath the day-to-day noise.
Each time the euro has approached that line from below and briefly crossed it — only to fall back — it sends a clear signal: sellers are in control.
These failed attempts, sometimes called false breaks, are a bit like a runner repeatedly stumbling just before the finish line. There was a brief moment of hope on June 18, when the euro managed to close above the average, but it could not hold that ground.
Why is the euro struggling? Largely because investors currently find the pound slightly more attractive. UK inflation has proven stubborn, meaning the Bank of England may keep interest rates higher for longer — and higher rates tend to draw investors in, boosting a currency. The euro, meanwhile, faces headwinds from slower euro zone growth, energy costs and geopolitical uncertainty.
Where could this go? If the euro stays below the 100-day moving average, it could slide back toward the June 2025 low of 0.8408. A convincing break above it, however, could open the door to a recovery toward the May highs near 0.8729.
What the chart shows:
(Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they might mean.)
