EUR/GBP hangs near 5-week lows ahead of UK jobs data

   •  Near-term oversold conditions prompt some short-covering. 
   •  UK employment details to provide some impetus ahead of BoE.

The EUR/GBP cross stalled its recent slump and staged a modest rebound on Wednesday, albeit lacked any strong follow-through.

The cross extended its downfall on Tuesday and dropped to its lowest level since Feb. 8 in the reaction of disappointing Germany ZEW survey, which to some extent negated softer than expected UK inflation figures. 

The bearish pressure now seems to have eased a bit as bears now seemed inclined to take some profits off the table, especially after a fall of over 220-pips from over 3-month tops touched earlier this month. 

Traders now look forward to the latest UK employment details for some fresh impetus. The key focus, however, would be on the BoE monetary policy decision, due to be announced during the European session on Thursday. 

Against the backdrop of yesterday's miss on the UK CPI front, weaker average earnings figures might fade BoE rate hike prospects and assist the cross to stage some meaningful recovery in the near-term.

Technical levels to watch

Any meaningful recovery is likely to confront immediate resistance near the 0.8775-80 region, above which the cross seems to recover back towards the 0.8800 handle. On the flip side, weakness below 0.8745-40 area might prompt some additional weakness and continue dragging the cross further towards testing the 0.8700 handle.