EUR/GBP finds resistance around 0.8860 ahead of UK Employment

The EUR/GBP pair has sensed resistance while trespassing the 0.8860 hurdle with weak buying interest. The cross is correcting gradually and is expected to remain extremely volatile ahead of the release of the United Kingdom Employment data, which is scheduled for Tuesday.

The strength in the Pound Sterling is coming from the confidence of UK Finance Minister Jeremy Hunt that their economy will be resilient and outperform this year.

Contrary to views from International Monetary Fund (IMF) managing director Kristalina Georgieva that the UK will be the weakest of all the major industrialized economies, with its Gross Domestic Product (GDP) contracting by 0.3% this year, as reported by SkyNews. US FM Hunt said he will "prove the Fund wrong” and that Britain's economy will outperform.

He further added that “We have so far avoided recession this year.” So the economy has shown resilience, but we want to be growing faster.

Going forward, the UK Employment data (Mar) will remain in the spotlight. The Claimant Count Change is expected to decline by 11.8k, higher than the former release of 11.2K. Continuous addition of job seekers into the labor force indicates tight labor market conditions. Three-month Unemployment Rate is likely to remain steady at 3.7%. Average Earnings excluding bonuses are expected to soften to 6.2% from the former recording of 6.5%. This might delight the Bank of England (BoE) as higher households' earnings have been a major catalyst for double-digit inflation.

On the Eurozone front, European Central Bank (ECB) President Christine Lagarde remained confident that inflation will gradually decline ahead. She cited that "Historically high wage growth, related to tight labor markets and compensation for high inflation, will support core inflation over the projection horizon, as it gradually returns to rates around our target,"