FxWirePro: EUR/GBP Daily Outlook

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading weaker for the second consecutive session.

The pair was trading 0.12% lower after closing 0.35% lower in the previous session.

Fundamental Overview:

Markets ignore the latest positive Brexit developments. Rising cases of the new Omicron covid variant in the UK overshadows the broader market optimism.

Data Released:

The German ZEW headline numbers for December showed that the Economic Sentiment Index unexpectedly improved to 29.9 from 31.7 previous while beating estimates of 25.3.

Meanwhile, the Current Conditions sub-index slumped to -7.4 in December as against 12.5 recorded in the previous month and 5.0 expectations.  

The Eurozone ZEW Economic Sentiment for December rose to 26.8 for the current month as compared to the 25.9 previous. 

Third estimate of the bloc’s Q3 Gross Domestic Product (GDP) came in at 2.2% QoQ vs. 2.2% expected and 2.2% previous.

The Eurozone Employment Change for Q3 arrived at 0.9% QoQ vs. 0.9% expected.

Technical Analysis:

- Price action was rejected below 200-DMA resistance

- The pair has slipped below 5-DMA which is capping upside 

- RSI has turned South and Stochs are on verge of bearish rollover from near overbought levels

- Price action is hovering at cloud base support, break below will plummet prices

Support levels - 0.8490 (Cloud base, 55-EMA), 0.8478 (21-EMA) 

Resistance level - 0.8509 (5-DMA), 0.8521 (110-EMA)

Summary: EUR/GBP bias has turned bearish after rejection at 200-DMA. Watch out for break below daily cloud for further weakness.