FxWirePro: EUR/GBP hits fresh multi-month lows, further downside on cards

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading 0.09% lower on the day at 0.8333 at around 08:20 GMT

Previous Week's High/ Low: 0.8418/ 0.8332

Previous Session's High/ Low: 0.8359/ 0.8332

Fundamental Overview:

Upbeat details of the UK British Retail Consortium (BRC) consumer survey buoy pound. 

Total sales in November were 5.0% higher than a year earlier, the biggest annual increase since July and up from an increase of 1.3% in October.

UK consumer spending increased in November, printed 16.0% higher than in November 2019.

Further, ebbing virus fears after comments from Merck, suggesting that the Molnupiravir mechanism to work against omicron, as well as any covid variant keep sentiment strong.

The single currency regains upside traction as markets await Christine Lagarde's speech.

Technical Analysis:

- EUR/GBP is extending weakness for the 6th straight week

- Price action is well below daily cloud and Chikou span is biased lower

- Momentum is strongly bearish, volatility is rising

- GMMA indicator shows major and minor trend are strongly bearish

Major Support and Resistance Levels:

Support - 0.8287 (Lower BB), 0.8182 (200-month MA)

Resistance - 0.8341 (5-DMA), 0.8365 (200H MA)

Summary: EUR/GBP poised for further downside. Scope for test of 200-month MA at 0.8182 in the near-term.