The EUR/GBP cross pair is in a bearish trend ever since 2020 started. After the Brexit deal at the end of 2020, the cross did not look back as the Pound rose aggressively across the board.
Mostly, this is a GBP move rather than a Euro move. The British Pound squeezed higher and failed close to 1.40, an incredible level considering that a few months after the Brexit referendum, it traded well below 1.20.
However, the Euro also contributed to the decline in the cross. The EUR/USD major is down over three-hundred pips from 2021 highs, while the GBP/USD remains close to its yearly highs. Hence, the difference between the two is seen in the declining cross.
Inflation in the United Kingdom is picking up steam – another factor contributing to the stronger Pound. Also, the Bank of England recently ruled out negative interest rates, for now, giving the Pound another reason to advance.
EUR/GBP Technical Analysis
Based on the double top pattern seen below, the cross still has a lot of room to the downside. The measured move points to the EUR/GBP cross to decline below 0.85, and it represents only the minimum distance that the price should travel. Therefore, bears may want to remain on the short side with a stop at 0.8850 and a take profit at 0.8450.