News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
EUR/GBP Reverses Sharply as Market Reacts to Controversial Trade Deal
Traders' Opinions
Summary:
The Euro (EUR) continues to weaken against the British Pound (GBP) for a second straight day, falling sharply amid growing discontent across Europe over the US-EU trade deal.
Sell
PENDINGEURGBP
EXP
0.86600
Entry Price
0.85500
TP
0.87500
SL
0.86379 +0.00260 +0.30%
--
Point
PENDING
0.85500
TP
CLOSING
0.86600
Entry Price
0.87500
SL
The Euro’s recent rally came to an abrupt halt this week as EUR/GBP extends losses for a second consecutive session, driven by growing political and economic tensions stemming from the controversial US-EU trade agreement signed over the weekend. As of Tuesday’s U.S. trading session, the EUR/GBP cross is down nearly 0.20%, trading around 0.8656, marking a deeper retracement from Monday’s intra-day peak of 0.8753 — a high not seen since November 2023. The sudden reversal suggests markets are reassessing not just the short-term risks, but also the broader trajectory of the Eurozone’s economic positioning.
The spark behind this sharp revaluation lies in the transatlantic trade accord that was unveiled on Sunday by U.S. President Donald Trump and European Commission President Ursula von der Leyen. While initially framed as a win-win breakthrough in transatlantic trade, the agreement has quickly come under fire across major EU economies. Critics in Germany, France, and Italy have blasted the deal as “deeply unbalanced” and “overwhelmingly favorable to the United States,” raising fresh doubts about the Eurozone’s global trade competitiveness at a time when domestic growth remains fragile.
The most contentious point of the agreement is the blanket imposition of a 15% tariff on a wide array of EU exports to the U.S., a massive leap from the current average of just 1.2%. Sectors hardest hit include automobiles, industrial machinery, pharmaceuticals, and high-end consumer goods — all vital pillars of the EU’s export-driven economy. Even though a "zero-for-zero" clause spares select categories such as aircraft parts, semiconductors, and some agricultural products, these account for merely 30% of total EU exports, leaving the bulk of the bloc’s output exposed to hefty levies.
In stark contrast, U.S. exports to the EU will remain tariff-free under the new framework, effectively giving American manufacturers a significant price advantage in European markets. Furthermore, the deal leaves intact punitive tariffs of up to 50% on EU steel and aluminum entering the U.S., deepening concerns among European industrial leaders that the agreement lacks true reciprocity.
The imbalance has not gone unnoticed by investors. The Euro has steadily lost ground as traders increasingly question the EU’s negotiating leverage and its ability to shield core industries from external shocks. The timing could not be worse: high energy costs, weakening consumer confidence, and the lingering effects of tight monetary policy are already threatening to cap growth across the continent.
Adding a further layer of complexity, President Trump met with UK Prime Minister Keir Starmer at his Turnberry estate in Scotland on Monday to discuss advancing U.S.-UK trade talks. According to sources cited by Reuters, the pair discussed lowering tariffs on pharmaceuticals and Scotch whisky, with Trump expressing a willingness to ease barriers on UK goods “in selected categories.” Starmer reportedly pushed for broader concessions, especially for the steel industry. The meeting, while short on finalized outcomes, adds to the narrative that the U.S. is building deeper bilateral ties with the UK — a move that may strategically sideline the EU in future trade realignments.
Looking ahead, the market will be closely watching Wednesday’s Eurozone economic data dump, which includes preliminary Q2 GDP estimates and key sentiment indicators for July. A weak reading would further sap confidence in the Eurozone’s growth outlook, reinforcing the bearish tone that has overtaken EUR/GBP. Conversely, stronger-than-expected figures may provide temporary relief, though any bounce in the Euro is likely to be constrained by the broader backdrop of trade policy uncertainty and investor skepticism.
Technical Analysis
From a technical standpoint, EUR/GBP has now given up over 0.76% from its weekly high, confirming what many analysts see as a corrective phase. Price action on the 4-hour chart suggests a developing market structure shift, with unmitigated liquidity building up around the 0.86100 zone — a level that could serve as a magnet for institutional order flow in the coming days. Traders eye this level as a likely downside target, with initial support seen at 0.85500 and deeper correction potential should sentiment deteriorate further.
The recent rejection of the 0.8750 resistance zone — a level that marked a two-year high — now looks increasingly like a false breakout. Momentum indicators are flashing bearish divergences, while volume profiles suggest heavy selling interest has emerged at the top, amplifying downside risks.
TRADE RECOMMENDATION
SELL EURGB
ENTRY PRICE: 0.8660
STOP LOSS: 0.8750
TAKE PROFIT: 0.8550
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2025 FastBull Ltd
Home News Columns 7x24 Economic Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.