FxWirePro: EUR/GBP slips below 5-DMA, potential shooting star raises scope for downside

Technical Analysis:

- EUR/GBP is trading an extremely narrow range as we head into the European session.
- Upside was rejected shy of major trendline resistance at 0.8680 and 100-DMA at 0.7632.
- The pair has slipped below 5-DMA at 0.8524 and is on track to test 20-DMA at 0.8451.
- Stochs have turned lower from near overbought levels and RSI is biased lower.
- We see potential 'shooting star' formation at highs, completion of pattern will see drag lower.

Fundamental Factors: 

- Holiday-thinned trades are likely to persist amid a New Year holiday observed in almost all major markets, except for Europe.
- Focus remains on the final manufacturing PMI reports lined up for release from the Euroland in the day ahead.

Important Levels:

- Support: 0.85, 0.7451 (20-DMA), 0.8432 (Dec 22 low), 0.8333 (Sept 6 low), 0.83 (major trendline)
- Resistance: 0.8524 (5-DMA), 0.86, 0.8630 (100-DMA), 0.8670 (trendline)

Recommendation: Good to short rallies around 0.8520/30, SL: 0.8575, TP: 0.8490/ 0.8450/ 0.84