Euro to Pound Forecast: Break Below 200-Day SMA Could Mean 0.8323

May 30, 2025 - Written by Tim Boyer

STORY LINK Euro to Pound Forecast: Break Below 200-Day SMA Could Mean 0.8323

The Pound to Euro exchange rate (GBP/EUR) spiked to 8-week highs around 1.1970 immediately after the US trade court ruled overnight that Trump’s reciprocal tariffs were unconstitutional.

The Euro was hit by wider position liquidation, but the pair retreated from highs and settled around 1.1940 as markets attempted to divine potential changes to the UK and EU trade negotiations and outlook.

The initial focus will be on Trump’s hints over the response.

With solid risk appetite, overall yields will tend to underpin the Pound, but resistance levels will be tough to break down.

According to ING Sterling is performing well and added; “EUR/GBP looks comfortable down here in the 0.8350-0.8400 area.” (1.1900-1.1975 range for GBP/EUR)

Following the ruling, there will be a significant element of uncertainty over the US-UK trade deal.

The deal was negotiated with expectations that reciprocal tariffs would go ahead, but the US ruling has injected fresh uncertainty.


The UK government, at this stage, is committed to speeding up the process, but there will inevitably be complications, and it will be difficult for negotiators to make headway given the lack of clarity.

The EU faces a high degree of uncertainty over its own negotiations with less immediate pressure to make concessions.

Overall, the UK position could be less attractive relative to the EU if wider US tariffs do not go ahead.

According to ING; “No doubt sterling's relatively high interest rates (4.30% per annum on a one-week deposit, versus 2.2% for the euro) are helping here. And there seems to be less fear over a tough UK government spending review on 11 June.”

Rabobank commented; "If the UK can continue its recent run of better-than-expected news, the 200 day sma would be in danger. A break below could put the April low close to EUR/GBP0.8323 in view.” (1.2015 for GBP/EUR).

Rabobank, however, is still wary over the underlying fiscal outlook; “That said, the Spending Review will likely be uncomfortable for both the government and investors alike. Also, while the EUR may be due a bout of profit-taking after this year’s move higher, Germany’s relatively better debt position and expectations for better growth in 2026 and should provide longer term support for the EUR."

Deutsche Bank is concerned over the risk of complacency surrounding European bond markets; “it’s striking that sovereign bond spreads are tightening in Europe, even though several of these countries have long had question marks over their debt sustainability, and they have slower trend growth than the US, and they don’t have the advantage of the global reserve currency.”


Germany also recorded a 34,000 increase in unemployment for May.

ING commented; “Overall, the German labour market's gradual turn continues, and it shows that restoring private consumption to the German economy will not be easy.”

There are strong expectations that the ECB will cut interest rates at next week’s policy meeting, reinforcing the Pound’s yield advantage.

According to Danske Bank; “We still expect the ECB to cut by 25bp in June, July and September to what we assume will be the terminal rate of 1.5%. Risks are tilted towards fewer cuts.”

HSBC injected a note of caution; “The certainty of a cut in the pricing creates some asymmetric risks that either the cut is not delivered, or the guidance does not support a further cut thereafter this year.”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Euro Pound Forecasts