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December 29, 2025

EUR/GBP Slides After BoE 25bp Cut; Pound Stays Supported Near 0.8720

Market snapshot: EUR/GBP trades below 0.8750 after BoE rate decision

EUR/GBP was trading around 0.8720 in early European hours as markets reacted to the Bank of England's December 25 basis‑point cut to 3.75%, passed by a narrow 5–4 vote. UK headline CPI cooled to 3.2% in November, providing the BoE room to ease while rhetoric remained cautious — a combination that currently underpins sterling strength and leaves EUR/GBP biased to the downside in the short term.

Why the move matters

The BoE cut is notable because it was accompanied by a split vote and careful forward guidance. That suggests the Committee is balancing disinflation trends with upside inflation risks, and it leaves the pound sensitive to tweaks in tone from BoE officials. Meanwhile, the European Central Bank has held rates steady, and market pricing shows little near‑term ECB easing — a backdrop that limits euro strength against a pound that still benefits from relative UK‑US policy divergence and resilient nominal yields.

Key drivers to watch

Bank of England rhetoric: Any more hawkish language from the BoE despite the cut could lift GBP and deepen EUR/GBP losses. Traders should watch speeches and the January communications calendar closely.

Euro‑area data and ECB signals: Stronger‑than‑expected inflation or activity metrics in the euro area — or a surprise hawkish pivot from the ECB — would support the euro and could reverse the current EUR/GBP move.

Geopolitical and macro shocks: Risk‑off events or economic surprises (UK or euro area) can rapidly change FX flows and spoil directional trades.

Technical outlook and tactical levels

Short‑term pattern: bearish. EUR/GBP is trading below the psychological 0.8750 level and currently near 0.8720. Traders should watch the following levels for intraday to short‑term setups:

Support: 0.8700 (near‑term), then 0.8640–0.8620 (previous lows).

Resistance: 0.8750 (minor), 0.8800 (stronger resistance where stops and supply may cluster).

Practical trade idea (risk-managed)

Bias: short EUR/GBP while price remains below 0.8750 and BoE rhetoric stays cautious.

Entry: consider a staggered short between 0.8730–0.8750.

Initial target: 0.8660–0.8620. Stop: above 0.8800 (adjust for position size and volatility).

Notes: use conservative position sizing; rising volatility around BoE/ECB commentary can produce whipsaws. Be mindful of spread widening during Asian/European session overlaps.

Risk management and event timing

Major event risk remains around central bank communications and macro prints. Because the BoE cut was narrowly decided, follow‑up speeches from MPC members carry asymmetric impact. Consider trimming positions before scheduled BoE or ECB briefings, or use options to define risk if you expect larger intraday moves.

How automated strategies can help

Automated trading and algorithmic execution can assist traders who need to manage multiple scenarios and tighten risk controls in fast markets. For forex trading specifically, tools that run rule‑based entries, dynamic stops, and liquidity‑aware execution reduce emotional errors during volatile sessions. Retail traders may deploy a dedicated Forex Trading Bot or a strategy assistant to manage staggered entries and exits around event windows.

Broader context and cross‑market signals

The BoE decision also has implications for related pairs. GBP strength tends to pressure EUR/GBP and can influence GBPUSD, while commodity and risk flows will feed into carry and correlation trades. Keep an eye on US data and Fed pricing — an unexpected change there could change cross‑rates quickly. See related coverage such as GBP/USD slide and analysis of euro moves like the EUR/USD slide.

Short checklist for traders

  • Confirm price action stays below 0.8750 before adding new short exposure.
  • Use explicit stop levels above 0.8800 and size positions for a 1–3% portfolio risk per trade.
  • Monitor BoE speeches closely — any hawkish tilt despite the cut could reverse gains for GBP.
  • Consider automated execution to scale into positions and manage stops during volatile windows with a Trade Assistant Bot.

Conclusion

EUR/GBP’s move below 0.8750 after the BoE’s 25bp cut reflects a market that is pricing sterling resilience amid cautious monetary policy messaging. The short‑term bias remains bearish, but traders should respect event risk and have clear exit rules. Whether you trade manually or use automated trading systems, disciplined risk management is essential.

If you want to test rule‑based entries, dynamic risk controls, or execute across forex and crypto markets, consider using algorithmic tools. PlayOnBit offers platforms to run automated strategies across markets — from forex to crypto trading — and tools like the Forex Trading Bot and the Trade Assistant Bot can help implement the setups described above.

Try an AI‑driven trading workflow at PlayOnBit to automate entries, manage stops, and backtest scenarios.

Note: This article is informational and not investment advice. Always do your own research and consult risk professionals before trading.