EUR/GBP Price Analysis: Hovers around 0.8350 post-FOMC December meeting minutes
- The EUR/GBP slides for the third time of the week.
- EUR/GBP is downward biased as portrayed by the DMAs located above the spot price.
- EUR/GBP Price Forecast: A break below 0.8335 would expose 2020 yearly lows around 0.8281.
The euro falls for the third consecutive day against the British pound, trading at 0.8340 during the North American session. The market sentiment is downbeat after the US Federal Reserve announced that it might raise rates sooner than expected. Furthermore, US central bank policymakers noted the possibility of reducing the balance sheet to tame inflation.
That said, the US stocks dropped while US Treasury yields rose, with the 10-year benchmark note touching 1.712%, a level last reached in April 2021.
EUR/GBP Price Forecast: Technical outlook
The EUR/GBP daily chart depicts that the cross-currency is downward biased. The daily moving averages (DMAs) reside well above the spot price, with the shorter time-frames below the longer time-frame ones.
At press time, the EUR/GBP downward move after the Fed’s minutes announcement was capped around 0.8336, January 4 daily low, which acted as the first line of defense of EUR bulls.
To the upside, the EUR/GBP first ceiling level would be the daily pivot point at 0.8357. The breach of the latter would expose the 100-hour simple moving average (SMA) at 0.8376, immediately followed by the R1 daily pivot at 0.8379. A break above that level would send the pair rallying towards the 200-hour SMA at 0.8399.
On the other hand, the cross-currency first support would be the January 5 daily low at 0.8335. A decisive break of that level would open the door for further losses. The next stop on the way down would be February 2020 swing lows around 0.8281.
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Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
