FxWirePro: EUR/GBP Daily Outlook

Chart - Courtesy Trading View 

EUR/GBP was trading 0.16% higher on the day at 0.8855 at around 06:50 GMT. Trade remains muted amid holiday in the UK.

The pair has ignored Doji formation on the previous session's candle and is extending gradual grind higher.

Traders remains cautious ahead of the release of the German Harmonized Index of Consumer Prices (HICP), which is due on Tuesday.

According to forecasts, the German inflation indicator is seen higher at 11.8% vs. the former release of 11.3%.

Apart from the German Inflation data, focus also remains on German Unemployment data, jobless rate likely at 5.5% from the former release of 5.6%.

German Unemployment Change (Dec) is expected to escalate to 27K against the former release of 17K. 

On the other side, final readings of the UK’s activity numbers for December will be important for immediate direction.

British labor strike and UK PM Sunak’s push back to childcare reform joins geopolitical concerns to weigh on the pound.

Support levels - 0.8841 (5-DMA), 0.8754 (21-EMA)

Resistance levels - 0.8921 (Upper BB), 0.8924 (cloud top)

Summary: EUR/GBP is showing signs of exhaustion. Overbought oscillators likely to cause some pullback. Major trend remains bullish. Bullish invalidation only below 21-EMA. Resumption of upside is likely to take the pair higher to test cloud top.