Feb 28 (Reuters) - EUR/GBP has been under pressure since late January, and the fundamental backdrop suggests there is little reason to fight the downtrend, which has further to fall.

France and Germany require new governments, U.S. President Donald Trump continues to threaten the European Union with tariffs, while the euro zone economy struggles.

The German conservative election winner Friedrich Merz's abrasive style could hamper his ability to build a coalition. A strong German government will be essential to manage the struggling EZ economy and potential U.S. tariffs on German and EU manufactured goods. Europe also needs functioning governments in Berlin and Paris to navigate the Ukraine crisis and potential U.S. tariffs.

Meanwhile, Trump has indicated the U.S. and Britain will have a trade agreement. Technology will be at the core of the economic deal according to Prime Minister Keir Starmer. A Lloyds bank poll shows British businesses turned more optimistic for the first time in seven months in February.

The European Central Bank is priced to cut rates by 77 basis points by September while the Bank of England is only expected to cut by 46 bp based on LSEG data .

Technically daily and weekly momentum studies, 5, 10 and 21 period moving averages trend lower, with the daily Bollinger bands. The 0.8225 December 19 low and the 2022 0.8203 base are initial supports. A close below 0.8200 would target long-term support at 0.7914, 61.8% of the 2015-2020 rise.
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)