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EUR/USD, EUR/GBP, TALKING POINTS:

  • EUR/USD faces pressure as fundamental factors weigh on risk sentiment
  • EUR/GBP battles it out at critical resistance
  • Can the Euro maintain resilience despite global lockdowns

Euro-Outlook-EURUSD-EURGBP-Key-Levels-Omnicron-Fears-Rise

NEW COVID RESTRICTIONS WEIGH ON THE EURO

A surge in the number of Covid-19 cases has placed governments under additional pressure as the Omnicron variant continues to spread at a rapid pace. With policy makers now implementing restrictions in an effort to reduce the number of infections, the ability for the Euro to maintain resilience in 2022 could remain a contentious issue

Visit the DailyFX Educational Center to discover why news events are Key to Forex Fundamental Analysis

As rising geopolitical risks and concerns surrounding progressive economic growth continues to weigh on risk sentiment, inflation and increasing government could provide an additional catalyst for price action for the Euro’s imminent move.

 

EUR/USD TECHNICAL LEVELS

Since 2018, the EUR/USD has been trading in a key area of confluence between the 76.4% and 61.8% retracement of the medium-term Fibonacci. This relatively tight span containing the two above-mentioned Fibonacci levels has formed clear areas of support and resistance. However, after breaking through the 61.8% level (1.11846), price action has favored the bulls, with the 50% retracement of the medium-term move now forming a level of support at 1.14407.

EUR/GBP TECHNICAL LEVELS

At the time of writing, EUR/GBP has temporarily managed to drive prices back above the 50-day moving average (Moving Average) at 0.85, currently providing support for the short-term move.

Although the downward trajectory has persisted since March last year, a break above trendline resistance has enabled bulls to retest the critical resistance of 0.854, the 14.4% Fibonacci retracement level of the 2021

 

EUR/GBP Daily Chart

Euro-Outlook-EURUSD-EURGBP-Key-Levels-Omnicron-Fears-Rise

 

Written by Tammy Da Costa, Analyst for DailyFX.com. 20th December 2021

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