The EUR/GBP rallies during the New York session, up some %, trading at 0.8542 at the time of writing. Market sentiment is pessimistic after a mixed US Nonfarm Payrolls report, as the US central bank looks forward to increasing the pace of the bond taper. Also, in the last couple of hours, an increment of COVID-19 infections with the Omicron variant appears to weigh investors’ moods as safe-haven currencies rise.
On Friday, during the overnight session, the EUR/GBP pair remained subdued, within December 2 low at 0.8488, and the daily central pivot at 0.8501. However, volatility shot through the roof as the American session began, and the EUR/GBP rose towards 0.8547. At press time, it appears the pair might consolidate around the 0.8500, also benefitted from the “safe-haven” status gained lately, on the low-yield EUR.
EUR/GBP Price Forecast: Technical outlook
The EUR/GBP daily chart shows that the cross-currency pair is approaching the 200-day moving average (DMA), sitting at 0.8557, which would see a level that GBP bulls would lean-to in their attempt to push the EUR/GBP pair lower. However, in breaking the latter, the first resistance would be the November 5 swing high at 0.8594, followed by the September 29 high at 0.8657.
Conversely, if the EUR/GBP upward move is faded at the 200-DMA, the first support would be the 100-DMA at 0.8514. A breach of that level could send the pair tumbling down to the 50-DMA at 0.8484, followed by the psychological 0.8400 support.