EUR/GBP trims losses below 0.9000 after UK jobs report
|- EUR/GBP print mild gains above 0.8950 following mixed British employment data.
- EU-UK leaders agree to fasten Brexit talks, weekly calls preferred over the monthly negotiations.
- Risk tone remains positive despite fears of coronavirus wave 2.0 emanating from Beijing.
- German ZEW data, virus/Brexit headlines be the key to fresh impulse.
EUR/GBP extends the pullback from the intraday low of 0.8943 to 0.8955, still down 0.30% on a day, during the early Tuesday. The pair’s latest move takes clues from the British employment data that came in mixed with a fall in Unemployment Rate confronting the higher claims.
The data suggests, the UK’s Claimant Count Change for May rose to 528.9K versus 370K forecast but the ILO Unemployment Rate for three months to April softened to 3.9% against 4.5% prior.
Read: Breaking: UK April Unemployment Rate beats estimates with 3.9%, GBP/USD unfazed
Earlier during the day, the pair dropped to the three-day low as markets cheered fresh optimism concerning the Brexit deal after the UK PM Boris Johnson talked with the EU leaders. The policymakers inferred fresh momentum in the negotiations during Monday’s talks and agreed to have the weekly discussions to speed-up the process of getting the deal by July. Also supporting the British Pound could be the news suggesting the human testing of the second virus vaccine.
Elsewhere, the market’s risk-tone remains positive after the US Federal Reserve widened the horizon of corporate bond buying while also opening doors for lending to the non-profit organizations. In doing so, the traders seem to have ignored fears of the second-wave the coronavirus (COVID-19) emanating from Beijing. The Chinese capital has so far recalled the partial lockdown in parts of the city. Additionally, news that the European countries prepare a draft resolution to require Iran to deal comprehensively with nuclear inspectors also probes the risk-on sentiment.
Having said that, the US 10-year Treasury yields gain near five basis points to print 0.75% as a quote whereas stocks in Asian and the US Futures are also on the bids by the press time.
With the British employment figures are out and loud, Brexit headlines and updates concerning the UK’s testing of the second vaccine for the deadly virus could offer immediate direction to the pair. On the other hand, Germany’s ZEW Economic Sentiment and Currently Situation, expected 60 and -84.7 respectively versus 51 and -93.5 in that order, act as additional directives for the pair traders.
Technical analysis
The pair’s repeated failures to stay positive beyond 0.9000 speaks loud of its short-term weakness. However, an ascending trend line since February 18, at 0.8913 now, questions the sellers during the EUR/GBP pair’s further downside.
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