EUR/GBP testing lows near 0.8540, 100-day SMA

The cross is down smalls in the 0.8550 region.
UK jobless rate ticked lower to 3.9% in January.
Meaningful Brexit vote unlikely this week.

Pablo Piovano FXStreet

The now buying bias around the British Pound is weighing on EUR/GBP and forces it to ease from daily highs and looks to stabilize in the current 0.8550 area.

EUR/GBP offered on UK data, Brexit

The European cross came under further selling pressure following mixed results from the UK labour market today, where the unemployment rate receded to 3.9% from 4.0% in January and wage inflation pressure remains on the rise after Average Earnings expanded more than expected during the same period.

On the not so bright side, Claimant Count Change rose by 27.0K jobs in February, missing consensus.

On this side of the Channel, the ZEW survey came in on a positive note, showing Economic Sentiment in both the euro area and Germany extended the rebound in March.

In the meantime, news around the Brexit negotiations cited another meaningful vote on PM May’s plan to leave the European Union this week appears highly unlikely, as negotiations between UK and EU officials gather extra pace as well as talks between the UK government and the DUP.

What to look for around GBP

The Sterling is expected to remain under scrutiny this week in light of a potential third meaningful vote on May’s UK-EU divorce plan. The House of Commons will probable vote on Wednesday although it all appears to hinge on a potential agreement between the Government and the DUP as well as noticeable changes to May’s original proposal.

EUR/GBP key levels

The cross is losing 0.07% at 0.8544 and a breach of 0.8471 (2019 low Mar.13) would expose 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017). On the other hand, the next up barrier is located at 0.8594 (high Mar.18) seconded by 0.8675 (high Mar.11) and finally 0.8733 (55-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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