EUR/GBP Price Forecast: Bears Remain in Control, 0.8550 Support Zone in Focus

EUR/GBP is trading at 0.85583, maintaining a weak consolidation pattern. As the standoff between the US and Iran continues to escalate, with Washington vowing strong action against Tehran in what it calls an "economic D-Day," market risk aversion is on the rise. Against this backdrop, the British pound has shown relatively stronger resilience, while the euro has extended its decline.

**Geopolitical risks weigh on the euro**

The stalled US-Iran peace plan and higher oil prices together constitute the key external factors capping the euro's performance. Amid the spread of mild risk aversion, investors prefer to hold sterling over the euro, keeping the cross under sustained selling pressure. The pair has slipped to consolidate near two-week lows, reflecting the market's cautious stance on the euro's near-term outlook.

**Key support level under test**

The 0.8550 support zone is drawing significant attention. Should the pair confirm a decisive break below this level, traders will quickly shift their focus to subsequent downside targets at 0.8530 and 0.8510. However, until a decisive breakdown occurs, the market is likely to remain range-bound around current levels. While bears maintain the upper hand, a sustained downside move would require fresh catalysts. Overall, as long as geopolitical tensions remain unresolved, the upside for EUR/GBP is likely to stay limited.