FxWirePro: EUR/GBP hovers around 5-DMA, traders await BoE, ECB policy meetings

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading 0.15% higher on the day at 0.8336 at around 05:30 GMT

Previous Week's High/ Low: 0.8422/ 0.8305

Previous Session's High/ Low: 0.8351/ 0.8323

Fundamental Overview:

Policy decisions from the Bank of England (BoE) and European Central Bank (ECB) are due at 1200 GMT and 1245 GMT respectively.

Focus also on the news conference with ECB President Christine Lagarde which is scheduled at 1330 GMT.

Markets have fully priced a 25 basis point hike from the BoE, so traders' focus will likely be on the outlook for cues.

While the ECB is not expected to offer up policy changes, hot consumer prices and recent strong labour data has raised expectations for a shift in tone.

Record high inflation and all-time low unemployment rate will likely favor ECB hawks to back rate hikes in 2022.

Technical Analysis:

- EUR/GBP capped below 21-EMA which is stiff resistance at 0.8352

- GMMA indicator shows major and minor trend are strongly bearish

- Momentum studies are biased lower, RSI is below 50 and Stochs are sharply lower

- Major moving averages are trending lower and volatility is low

Major Support and Resistance Levels:

Support - 0.8190 (200-month MA), Resistance - 0.8352 (21-EMA)

Summary: EUR/GBP technical bias is bearish. However, hawkish tone from the ECB could see some gains in the pair. Break above 21-EMA could see some upside. Next major resistance lies at 55-EMA at 0.84.