Data published by Destatis earlier on Monday revealed that factory orders fell by 3.8% in April, marking a decline more than three times larger than the 1.2% drop anticipated by the market consensus. In addition, the figures for March were revised downward to show an increase of 4.5% instead of the previously estimated 5.0% expansion. These statistics highlight the negative impact of the conflict in the Middle East on the Eurozone's industrial sector. Along the same line, the Sentix Investor Confidence index for June improved to -13.4 points from the -16.4 logged in May, achieving its best result in three months but remaining far from leaving negative territory. Meanwhile, the EU economy grew by 0.1% quarter-on-quarter in the first quarter of 2026, slowing down from the 0.2% and 0.3% growth rates recorded in the fourth and third quarters of 2025, respectively, which hints at an ongoing economic cooling amid rising prices. This occurs as the HICP reached 3.2% year-over-year, driven mainly by the energy shock tied to the conflict in Iran. The latest inflation figures from the Eurozone continue to support ongoing concerns regarding persistent price pressures. In this context, it is probable that the ECB will raise its key interest rates for the first time in nearly three years on Thursday. This move would make the central bank the first among its major peers to tighten policy in response to rising energy costs linked to the Middle East conflict.

In the United Kingdom, Halifax House Price Index data published early on Friday showed an unexpected contraction in May, with prices falling by 0.1% to confirm a fourth consecutive monthly decline, against expectations for a 0.1% increase. On a year-over-year basis, house prices grew at a rate of 0.5%, which is higher than the 0.4% seen in April but stands at half of the 1% market consensus. Meanwhile, Bank of England (BoE) policymaker Alan Taylor stated on Monday that interest rates at their current level remain restrictive for the economy and that he saw no immediate need for a hike to tackle the inflationary pressures that have grown as a result of the war in Iran. Last week, BoE Governor Andrew Bailey declared that the UK central bank is in no hurry to raise rates while the outcome of the war in Iran remains uncertain and the UK's growth rate stays weak. Even so, a shift in expectations has occurred; financial markets previously expected the BoE to cut interest rates twice this year down to 3.25%, but since the start of the conflict between the U.S. and Iran, the situation has reversed, and a 25-basis-point increase is now projected before December, according to reports from CNBC.

From a chart perspective, EUR/GBP has turned upward once again after touching the horizontal support floor at 0.8623. This specific level was also tested twice during the month of May, with the price showing an immediate upward reaction on both occasions, which indicates that it remains an important support zone. Because of this defense, we could see a renewed upward move targeting the horizontal resistance ceiling located at 0.8681. This target area holds technical importance because it sits directly between the 0.50 and 0.618 Fibonacci retracement markers, meaning it could easily function as the main objective for a corrective upward move. Meanwhile, the 100 and 200-period Moving Averages are currently tracking at 0.8646 and 0.8652, respectively, right above immediate price action, so a clean closing break above these lines could quickly accelerate the upward reaction.

A look at the oscillator section provides further confirmation for this potential upside path. The Relative Strength Index (RSI) is currently tracking at the 43 level, though it has shown clear difficulty in breaking beneath the 34 mark during recent downward attempts. This pattern suggests that the sell-side strength is struggling to build steady momentum, making an upward rejection off the support floor look more likely.

At the same time, the MACD indicator is showing a negative histogram that is rapidly losing its downward depth, while its signal lines are running just below the neutral zero line without developing any significant downward extensions. Because of this positioning, a fresh upward crossover of the signal lines would add extra technical weight to the setup, suggesting that the upward move could start to develop at a faster pace.

Trading direction: Buy

Entry price: 0.8630

Target price: 0.8680

Stop loss: 0.8600

Validity: Jun 23, 2026 15:00:00