EUR/GBP Stays Under Pressure as US-Iran Conflict Intensifies

Traders' Opinions

Summary:

The Euro remained pinned near one-year lows against the British Pound as rising geopolitical tensions in the Middle East boosted oil prices and weighed on sentiment toward the single currency. Stronger-than-expected German trade data offered little support as investors focused on escalating US-Iran tensions.

SELL EURGBP

EXP

TRADING

0.85150

Entry Price

0.84000

0.85600

0.85116 -0.00106 -0.12%

0.0

Pips

Flat

0.84000

Exit Price

0.85150

Entry Price

0.85600

The Euro remained under pressure against the British Pound on Friday, with EUR/GBP hovering near the 0.8520 level, just above its lowest levels in more than a year. Although Germany delivered stronger-than-expected trade figures, investors largely ignored the positive economic surprise as geopolitical developments in the Middle East continued to dominate market sentiment.

Germany's trade surplus widened to €19.1 billion in May, significantly above market expectations, as exports unexpectedly increased while imports softened. Under normal circumstances, such data would have provided support for the common currency. However, in my view, the report was overshadowed by mounting geopolitical risks, leaving the Euro unable to attract meaningful buying interest.

Market attention remains firmly focused on the escalating confrontation between the United States and Iran after fresh US military strikes prompted retaliatory attacks targeting American bases in the Gulf region. US President Donald Trump also declared that the ceasefire agreement was effectively over, raising fears of a prolonged conflict across the region.

Those concerns triggered a sharp rebound in crude oil prices, with Brent crude briefly climbing back toward the $80-per-barrel mark after trading near $70 only a week ago. The surge in energy prices has renewed inflation concerns and increased uncertainty over the economic outlook for Europe, which remains heavily dependent on imported energy.

Technical Analysis

EUR/GBP continues to trade with a distinctly negative bias, as the pair remains confined within a descending price channel on the 1-hour chart. Every recovery over the past two weeks has been met with renewed selling interest, leaving a clear sequence of lower highs and lower lows intact. Until that pattern changes, sellers retain the upper hand.

The latest rebound stalled almost exactly at the channel ceiling near 0.8525, reinforcing that area as the first major hurdle for any meaningful recovery. Repeated rejection from this dynamic resistance suggests bullish momentum remains fragile, with the market struggling to generate enough buying pressure to challenge the broader downtrend.

Immediate support sits around 0.8480, where price is expected to find its next test. Should that floor fail to hold, downside pressure is likely to accelerate toward the 0.8445 region, which coincides with the lower boundary of the declining channel. A decisive move beneath that area would confirm another leg lower and expose the 0.8420 zone.

Only a sustained recovery above 0.8530, followed by acceptance above 0.8550, would begin to undermine the current bearish outlook. Such a move would invalidate the sequence of lower highs and suggest that downside momentum is beginning to fade.

Although momentum oscillators are not displayed on this chart, price action itself paints a clear picture. Selling pressure continues to emerge on rallies rather than declines, highlighting that market participants are still using strength as an opportunity to establish short positions instead of chasing higher prices.

TRADE RECOMMENDATION

SELL EUR/GBP

ENTRY PRICE: 0.8560

STOP LOSS: 0.8545

TAKE PROFIT : 0.8400

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