EUR/GBP targets decade-high as ECB-BoE policy divergence widens

EUR/GBP has gained 0.45% over the past two weeks, trading at 0.8420 as monetary policy divergence between the European Central Bank and Bank of England becomes increasingly apparent. The ECB appears to be nearing the end of its easing cycle with markets pricing in only 50 basis points of additional cuts through 2025, while the BoE retains substantial room for dovish action amid persistently weak UK economic data. UK GDP growth has stagnated at 0.1% quarterly, while inflation remains stubbornly below target at 1.8%. The pair is approaching the upper boundary of its decade-long trading range near 0.8550, with immediate resistance at 0.8450. Technical indicators suggest bullish momentum building, with the 50-day moving average crossing above the 200-day MA. A sustained break above 0.8550 could trigger acceleration toward 0.8700, levels not seen since 2016.