EUR/GBP Analysis: Euro Faces Resistance Above 0.8700 as Pound Gains Ground

September 3, 2025 11:43

• Euro bulls rejected above 0.8700 level as British Pound regains momentum on Wednesday
• Better-than-expected UK Services PMI data provides solid support for Sterling
• EUR/GBP price action contained within broadening wedge pattern, signaling potential volatility ahead

The Euro's rally against the British Pound has failed to establish firm footing above the critical 0.8700 threshold, with the pair retreating during Wednesday's European session. The cross turned negative on daily charts, reaching 0.8685 at the time of writing as Sterling found renewed buying interest.

The upward revision of the UK Services PMI for August has significantly bolstered the Pound, helping offset lingering market concerns about Britain's fiscal deficit position. Meanwhile, Eurozone economic indicators delivered mixed signals, with services activity revised lower while factory prices exceeded market expectations.

Technical Analysis: EUR/GBP Trapped in Expanding Wedge Formation

The EUR/GBP technical landscape shows deteriorating bullish momentum, with the pair operating inside a broadening wedge pattern—a technical formation that typically indicates heightened market emotions and often precedes significant price movements in either direction.

Euro bulls encountered strong selling pressure at Tuesday's high near 0.8710, just short of the wedge's upper boundary now positioned at 0.8725. Should buyers overcome this resistance zone, attention would shift to the August 7 high at 0.8745, followed by the July 23 peak at 0.8755.

On the downside, immediate support emerges at the August 22 and August 29 swing highs around 0.8670. Further weakness could expose the September 1 low at 0.8635, with the wedge's lower boundary providing major support near 0.8320.

Economic Data: UK Services Sector Outperforms Expectations

S&P Global Services PMI

The S&P Global Services PMI, a key indicator measuring business activity in the UK's services sector, came in stronger than anticipated for August. The index registered at 54.2, significantly above both the consensus forecast and previous reading of 53.6. Readings above 50 indicate economic expansion, with the stronger-than-expected result providing fundamental support for Sterling.

Last release: Wed Sep 03, 2025 08:30
Frequency: Monthly
Actual: 54.2
Consensus: 53.6
Previous: 53.6
Source: S&P Global

S&P Global Composite PMI

The Composite PMI, which combines both manufacturing and services sector activity, also exceeded expectations at 53.5 compared to the consensus and previous reading of 53.0. This further confirms expanding economic activity across the broader UK economy, reinforcing the Pound's underlying strength.

Last release: Wed Sep 03, 2025 08:30
Frequency: Monthly
Actual: 53.5
Consensus: 53
Previous: 53
Source: S&P Global

For traders tracking the EUR/GBP pair, the current average exchange rate for 2025 stands at approximately 0.85 GBP per EUR, with recent market fluctuations showing increased volatility around this median value. Professional traders on leading trading platforms continue to monitor this pair closely as economic divergence between the UK and Eurozone remains a key driver of price action.