- Sterling strengthened against the euro on October 12 as French bond-market concerns continued to undermine confidence in the single currency.
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EUR/GBP's hourly Elliott Wave count shows a completed fourth-wave triangle followed by a developing bearish fifth wave.
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A corrective rebound toward 0.84550 could precede another decline toward 0.84350, provided resistance holds.
EUR/GBP News: French Debt Concerns Support Sterling
The euro weakened against the British pound on Monday, approaching its lowest level in roughly 16 months as concerns about French government debt intensified.
Reuters reported that EUR/GBP touched approximately 0.8449, while the widening spread between French and German government bond yields continued to weigh on the euro. Sterling also benefited from expectations that the Bank of England could raise interest rates at its November meeting.
Attention now turns to speeches by Bank of England policymakers this week and the UK's August GDP report scheduled for Thursday, October 15. Stronger British economic data could reinforce sterling's advantage, whereas disappointing growth figures may limit further gains.
EUR/GBP Elliott Wave Analysis: Triangle Completion Opens the Door to Wave (v)
The EUR/GBP hourly chart shows that wave (iv) completed a contracting triangle labeled a–b–c–d–e, ending at 0.84852.
The subsequent decline appears to mark the beginning of wave (v), with the first internal five-wave sequence, labeled i, followed by a corrective wave ii that peaked at 0.84658.
Selling pressure then resumed, pushing the pair toward 0.8445 before another short-term rebound began.
At the latest chart reading of 0.84488, the developing structure suggests a smaller wave 2 recovery toward the 50% Fibonacci retracement around 0.84550.
If the rebound encounters resistance there, wave 3 could drive EUR/GBP toward approximately 0.84350, extending the broader fifth-wave decline.
A break below the recent low around 0.8445 would provide initial confirmation of renewed bearish momentum.
Conversely, a sustained recovery above 0.84550 would suggest the immediate correction is extending. A move beyond 0.84658 would invalidate the proposed smaller-degree wave 1–2 bearish sequence.
EUR/GBP Outlook: Bearish Momentum Remains in Control
The short-term trend favors sellers, supported by the completed triangle and subsequent impulsive decline.
However, the projected wave 3 remains conditional on the corrective rebound ending and price breaking the recent low. The 0.84550 resistance and 0.8445 support therefore form the immediate decision levels.
Upcoming Bank of England commentary and UK growth figures could influence whether the anticipated decline accelerates or the correction extends.
