FxWirePro: EUR/GBP pauses at 21-EMA support, more weakness on cards

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading 0.32% lower on the day at 0.8400 at around 09:15 GMT

Previous Week's High/ Low: 0.8470/ 0.8284

Previous Session's High/ Low: 0.8446/ 0.8410

Data Released:

UK economy contracted less than anticipated, by 0.2% in December, and expanded by 1% during Q4 2021 as against expectations for the 1.1% increase, data published by the UK Office of National Statistics showed. 

Manufacturing output printed at 0.2% MoM in December, better than 0.1% expected and 0.7% in the prior month, while total industrial output came in at 0.3% vs. 0.1% expected and 0.7% last.

On an annualized basis, the UK manufacturing production figures came in at 1.3% in December, beating expectations of 1.7%. 

Total industrial output rose by 0.4% in the said month, against a 0.6% reading expected and the previous month's reading of -0.2%. 

UK goods trade balance numbers arrived at GBP-12.534 billion in December versus GBP-12.50 billion expectations and GBP-11.337 billion last. 

Total trade balance (non-EU) came in at GBP-7.876 billion in December versus GBP-5.665 billion previous.

Technical Analysis:

- EUR/GBP was rejected at 110-EMA and daily cloud resistance 

- RSI is sharply lower and Stochs confirm a bearish rollover from overbought levels

- 5-DMA has turned and price action has slipped below 55-EMA

- GMMA indicator has turned bearish on the hourly charts

Major Support and Resistance Levels:

Support - 0.8390 (21-EMA), Resistance - 0.8408 (55-EMA)

Summary: EUR/GBP poised for further downside. Watch out for break below 21-EMA for further downside.