The euro edged lower against the pound (EUR/GBP) in Asian trading on Tuesday, but remained within its recent trading range. The pair had risen to around 0.8515 on Friday before retreating below 0.8500, primarily influenced by improved UK employment data and changes in global risk factors. Recent market sentiment has been somewhat limited by escalating geopolitical risks and rising energy prices. Given the European economy's high dependence on energy imports, rising oil prices can increase production costs for businesses and affect market assessments of the Eurozone's economic growth prospects. Better-than-expected UK employment data provided some support for the pound. Data showed that the ILO unemployment rate remained at 4.9% for the three months to May, lower than the market's previous expectation of a rise to 5%. Furthermore, the number of people applying for unemployment benefits in the UK increased by approximately 6,700, significantly lower than the market expectation of 28,300. Meanwhile, the change in unemployment claims for April was also significantly revised downward, from the previously expected 31,200 to approximately 1,300. The resilience of the UK job market strengthened market confidence in the pound, but the data's impact remained relatively limited . Investors believe that although employment performance improved, pressure on UK economic growth remains, and future trends will need to be judged in conjunction with inflation and consumption data. UK political factors also influenced the pound's performance. After being appointed Prime Minister, Andy Burnham stated that he would continue to adhere to the fiscal rules previously established by the government, while emphasizing that he would maintain a certain degree of flexibility within those rules to promote measures to alleviate cost-of-living pressures. The market has some concerns about the flexibility of fiscal policy, with some investors worried that increased future fiscal spending could affect UK fiscal stability and put pressure on the pound. Therefore, despite improved employment data, the pound's gains remained limited. Regarding the euro, recent market focus has been on the European Central Bank's (ECB) policy path. The ECB will announce its interest rate decision this week, and the market widely expects it to maintain the current interest rate level. However, investors will be closely watching for the possibility of another rate hike in September. If the ECB releases a hawkish signal, the market may raise its euro interest rate expectations again, providing support for the euro; however, if the central bank emphasizes economic growth risks, the euro may continue to be under pressure. Meanwhile, changes in the global energy market remain an important factor affecting the euro against the pound. Recently, crude oil prices rose to a six-week high, mainly driven by concerns about supply risks. However, with news of potential ceasefire arrangements emerging in the market, oil prices have retreated somewhat, and the risk premium has temporarily decreased. The market is currently awaiting the Eurozone ZEW economic confidence survey data. This data will reflect investors' views on future economic trends and may affect the euro's short-term performance. Overall, the euro against the pound is currently in a balanced phase. UK employment data provides support, while ECB policy expectations and changes in the energy market will determine the euro's future direction. The daily chart for the euro against the pound shows that the exchange rate has recently maintained a range-bound pattern and has currently fallen back to around 0.8500. In the short term, prices remain in a high-level consolidation phase. The first resistance level to watch is 0.8515; a break above this level could lead to further tests of resistance around 0.8530 and 0.8550. On the downside, the first support level to watch is 0.8480, near the recent low; a break below this level could lead to a pullback towards 0.8450 and 0.8420. The daily moving average structure indicates that EUR/GBP still lacks a clear direction, with the market awaiting fundamental factors to drive a breakout. Looking at the 4-hour chart, EUR/GBP is showing short-term weakness, with prices testing the 0.8500 level after a pullback from around 0.8515. The MACD indicator shows weakening upward momentum, suggesting short-term downward pressure; the RSI indicator has fallen back to neutral territory, indicating a balance between bullish and bearish forces. If prices regain a foothold above 0.8500 and break above 0.8515, a rebound may resume; a break below 0.8480 could open up further downside potential. Short-term trends will still depend on the ECB's policy signals, UK economic data, and changes in market risk sentiment. Editor's Summary: The euro/pound exchange rate is currently influenced by the resilience of the UK economy and expectations regarding European policy. Improved UK employment data eased pressure on the pound, but discussions about fiscal policy flexibility still bring some uncertainty. For the euro, rising energy prices and geopolitical risks limit its upside potential, but future policy signals from the European Central Bank (ECB) could become a new driving force. In the short term, the 0.8500 area is a key level to watch. If the ECB releases hawkish signals, the euro may gain upward momentum; if UK economic data continues to exceed expectations, the pound may maintain its advantage. Going forward, the market will focus on the ECB interest rate decision, Eurozone economic confidence data, and changes in the global energy market. The exchange rate may continue to fluctuate, awaiting a new directional breakout.