Sterling Crushed by Double-Contraction GDP – EURGBP Spikes, Next Stop 0.8850–0.8900

EURGBP gained slightly after the dismal UK GDP. As long as support 0.8720 holds, intraday bias is positive. Currently trading at 0.87701, it reached an intraday high of 0.87747.

UK GDP unexpectedly shrank for a second consecutive month in October 2025, falling 0.1% m/m against expectations of a 0.1% rebound, confirming that the economy is flatlining after two straight contractions and near-zero Q3 growth of just 0.1% q/q. Persistent weakness in manufacturing and production continues to offset meager gains in services and construction, pushing the rolling three-month growth rate to a barely positive 0.1% and annual momentum down to 1.1%. The downside surprise strengthens the case for a more dovish Bank of England in early 2026, putting renewed downward pressure on sterling and gilt yields as hopes for a meaningful Q4 recovery fade fast.

Technical Analysis

The pair is currently trading above 55 and 200- EMA and 365-EMA on the 4-hour chart.

Bearish Trend Confirmation: Any break below 0.8720 confirms an intraday bearish trend. A drop to 0.8700/0.8660/0.8630/0.8600 is likely.

Near-Term Resistance:  The near-term resistance is around 0.8780. Any violation above will take the pair to 0.8825/0.8865/0.8900/0.8950.

Indicator Analysis (4-hour chart)

CCI (50): Bullish

Average Directional Movement Index:  Bullish

Trading Recommendation

It is good to buy on dips around 0.8758-60 with SL around 0.8720 for a TP of 0.8858.