EUR/GBP Price Analysis: Jumps from 0.8500 to 0.8540s amid a risk-off market mood

• The euro recovers some ground against cable, up some 0.32%.
• EUR/GBP Technical outlook: The daily chart, has a downward bias, as long as the 200-DMA and a downslope trendline hold.
• EUR/GBP Technical outlook: The 1-hour chart has an upward bias, but it would face strong resistance around 0.8550s.

The shared currency grinds higher, recovering from Friday’s losses, is trading at 0.8543 during the New York session at press time. The market sentiment stills downbeat since the Wall Street open, as portrayed by European stock indices recording losses, while across the Atlantic, the US indices are down between 0.71% and 1.55%.

In the European session, the UK informed the death of the first omicron-linked COVID-19 case that spurred the switch in market mood. That triggered a move from 0.8500 up to 0.8520 in the cross-currency pair, as investors look for low-yielding peers as safe-haven flows. The British pound continued weakening against the euro in the last couple of hours, though the EUR/GBP pair will face strong resistance around 0.8550.

EUR/GBP Price Forecast: Technical outlook

Daily chart

From the daily chart perspective, the pair still tilted to the downside, as long as the 200-day moving average (DMA) remains respected. However, during today’s price action, the cross-currency bounced at the 100-DMA at 0.8511, so the EUR/GBP could be range-bound unless a catalyst hits the market.

To the upside, the first resistance would be the 200-DMA at 0.8555. If the 200-DMA gives way to EUR bulls, then the next resistance would be a downslope trendline that travels from April highs through July’s one, around the 0.8575-95 area, followed by the figure at 0.8600.

On the other hand, the first support would be the 100-DMA at 0.8511. A break of that level would expose 0.8500, followed by the 50-DMA at 0.8480.

1-hour chart

In the 1-hour chart, the EUR/GBP is tilted to the upside, though it would face strong resistance at a downslope trendline that travels from December 9 highs, passing around the 0.8550-60 area. In the event of breaking to the upside, the first resistance would be 0.8588, followed by 0.8600.

On the flip side, the first support would be the 100-hour simple moving average (SMA) at 0.8541, followed by the 50-hour SMA at 0.8534 and then the 200-hour at 0.8527.