The British pound has surged to a nine-month high against the euro, hitting levels not seen since June 2024, according to Societe Generale strategist Kenneth Broux. EUR/GBP has plunged into 0.84 territory after breaking critical technical support at 0.8610, representing a 4.5% decline since November. The breakdown follows a Head and Shoulders pattern breach, a bearish signal that has accelerated selling pressure on the euro.
However, Broux warns the move is now technically stretched, suggesting limited further downside in the near term. The sharp sterling strength reflects diverging monetary policy expectations and economic outlooks between the UK and eurozone, impacting cross-border trade flows and corporate hedging strategies. Currency traders and UK exporters face immediate pressure from the pound’s strength, while eurozone importers may find relief.
FXnCO Insight
With EUR/GBP at stretched levels after a 4.5% drop, traders should watch for potential profit-taking and short-term reversal signals before initiating fresh sterling longs at current levels.
Source: FXStreet