EUR/GBP stuck under 0.8655 as weak German data boosts ECB-dovish bets

EUR/GBP remains under pressure, trading just below the key 0.8655 resistance after weaker-than-expected German industrial production. The latest data adds to fears that Europe’s manufacturing downturn is deepening, reinforcing a more dovish ECB stance for longer. For traders, the near-term focus is technical: EUR/GBP is range-bound between 0.8600 support and 0.8655 resistance, with the 50-day moving average converging near the ceiling—making an upside break harder without a clear shift in economic data or rate expectations. On the UK side, the pound holds up better, supported by expectations the Bank of England will be cautious with rate cuts amid persistent services inflation. With fewer UK releases this week, attention turns to eurozone catalysts (notably Germany’s ZEW sentiment and further industrial production). A downside surprise could push EUR/GBP below 0.8600, while a sustained recovery above 0.8655 likely requires stronger eurozone prints or a hawkish repricing of ECB expectations. Overall, EUR/GBP is at a technical crossroads where German macro signals are likely to drive the next move—potentially lifting broader FX risk sentiment.