EUR/GBP Price Forecast: Holding below 0.8580 with dips limited so far

The Euro (EUR) dipped against the British Pound (GBP) on Thursday, trading at 0.8575, while staying below its July 29-30 peak of 0.8586. Eurozone economic data, including German Factory Orders rising 3.1% in June, bolstered the EUR. UK-based Rabobank analysts believe that a re-pricing of the Bank of England's (BoE) policy expectations, combined with nervousness before the October budget, may cause the pound to weaken as the summer ends.

Rabobank sees potential in buying EUR/GBP when it dips to the 0.8550 area. Technical indicators show weaker bullish momentum in the EUR/GBP pair, with the Relative Strength Index nearing 50 and the MACD close to zero. Bulls need to break the 0.8586 resistance level, set on July 29 and 30, to confirm the uptrend and aim for the late June low of 0.8605.

If this fails, bears could target the 0.8560-0.8565 area and aim for the July 31 low near 0.8540, which would form a double top pattern. Support levels are at 0.8548, followed by 0.8529 and 0.8510, with deeper structural levels at 0.8419 and 0.8327. On the upside, resistance initially lies at 0.8587, with further targets at 0.8606, 0.8730, 0.8741, 0.8790, and 0.8863.