EUR/GBP stuck in a tight range as traders observe the war

EUR/GBP has remained in a tight range around the mid-0.8500s on Friday, unchanged from the previous day. Eurozone economic data came in line with expectations, with GDP growing 0.4% in the second quarter and employment rising 0.1%. The UK data also matched forecasts, leaving the Pound without a clear lead. The conflict in the Middle East continues to impact energy prices and the inflation outlook for the European Central Bank.

Until this situation becomes clearer, traders are hesitant to commit to a direction. On the 4-hour chart, EUR/GBP is trading at 0.8548, just below a cluster of resistance levels and horizontal barriers. The pair holds slightly above the 20-period SMA and the recent relative strength index reading suggests a range-bound bias. To challenge the current range, EUR/GBP would need to break above the nearby resistances at 0.8549 and 0.8550, which would be necessary to open a more positive short-term outlook.

Meanwhile, GBP/USD has gained momentum, reaching new three-month highs near 1.3560 after a series of daily declines. EUR/USD has also advanced, reaching the upper 1.1500s for the first time since mid-June, driven by a strong retracement in the US Dollar despite ongoing Middle East tensions. Gold has rebounded towards the $4,400 mark as concerns about the US Dollar decrease and expectations of a possible Fed interest rate hike ease.