Euro remains flat with Sterling despite upbeat German data

EUR/GBP traded around 0.8560 on Tuesday, little changed, as a run of stronger German data failed to give the Euro (EUR) a clear lift against a resilient Pound. The pair remains pinned near its 20 and 100-period Simple Moving Averages (SMA), with neither side able to force a break.

Second-quarter Gross Domestic Product (GDP) rose 0.3% on the quarter, above the 0.2% forecast, while the annual rate ticked up to 1%. The bigger surprise came from the IFO business sentiment survey, where the headline Business Climate index jumped to 88.8 in August from 86.7, well ahead of the 87.2 expected.

The Pound Sterling has traded near a six-month high against the US Dollar (USD), helped in part by a soft Greenback, which could explain the Euro failing to gain amid better than expected German data.

The upbeat figures trim the case for further European Central Bank (ECB) easing at the margin, but not by enough to move the needle against a Pound that has held its ground. The result is a pair going nowhere despite a busy data slate.

Short-term technical analysis:

On the 4-hour chart, EUR/GBP trades at 0.8557, holding just under a band of nearby resistance and keeping a mildly bearish near-term tone. The pair is capped by the 100-period Simple Moving Average (SMA) around 0.8559 and the 20-period SMA near 0.8560, while a horizontal barrier at 0.8562 reinforces this overhead supply zone. Momentum is subdued, with the Relative Strength Index (RSI) hovering just below the 50 line, which suggests a consolidative bias but leaves the cross vulnerable while it remains constrained beneath this cluster of moving average and horizontal resistance.

On the downside, immediate support aligns with the horizontal pivot at 0.8557, and a sustained break lower would expose the next cushion at 0.8551. On the topside, a clear move above 0.8559–0.8560 would be needed to ease the current pressure and open the way toward the 0.8562 resistance, with failure to reclaim this band likely keeping rallies shallow in the short term.