For this simple Template Sensor, you aren’t obligated to create an automation to update it. You can simply add sensor.date to the template and it will be automatically assigned a listener (in other words, it will behave like in previous versions where you used entity_id: sensor.date).
- platform: template
sensors:
zodiac:
friendly_name: Zodiac Sign
value_template: >-
{% set x = states('sensor.date') %}
{% set yday = now().timetuple().tm_yday %}
{% if yday < 20 %} Capricorn
{% elif yday < 50 %} Aquarius
{% elif yday < 80 %} Pisces
{% elif yday < 110 %} Aries
{% elif yday < 141 %} Taurus
{% elif yday < 172 %} Gemini
{% elif yday < 204 %} Cancer
{% elif yday < 235 %} Leo
{% elif yday < 266 %} Virgo
{% elif yday < 296 %} Libra
{% elif yday < 326 %} Scorpio
{% elif yday < 356 %} Sagittarius
{% elif yday < 366 %} Capricorn
{% else %} Error
{% endif %}
icon_template: >
{% set sign = states('sensor.zodiac') %}
{% if sign in ['Error', 'unavailable', 'unknown'] %}
mdi:alert-circle
{% else %}
mdi:zodiac-{{ sign | lower}}
{% endif %}
EDIT
Corrected typo; changed mid to mdi.