EUR/GBP tumbles to lows near 0.8500 post-UK data

  • EUR/GBP drops to lows in the 0.85 neighbourhood.
  • UK labour market report surprised to the upside.
  • ZEW Survey also surpassed expectations.

The current bout of buying pressure around the sterling is forcing EUR/GBP to recede to the area of daily lows in the 0.85 region.

EUR/GBP offered on UK data

The European cross gathered extra downside pressure on Tuesday after the UK labour market report came in on the strong side for the month of December.

In fact, the Claimant Count Change came in at 14.9K during last month and Average Hourly Earnings expanded 3.2% during November, both prints surpassing initial estimates. In addition, the jobless rate stayed put at 3.8% on the three months ended in November.

Following the data releases, the cross remains in 2-day lows near the 0.8500 mark, always within the broader sideline theme prevailing since the start of the new year.

What to look for around GBP

GBP has managed to regain some poise in response to better-than-expected results from the key labour market. In the meantime, investors’ attention remains on the upcoming Brexit deadline (January 31st) and the subsequent and key trade negotiations with the European Union. However, rising speculations of a probable rate cut by the BoE in the near-term carry the potential to undermine further gains in the quid.

EUR/GBP key levels

The cross is losing 0.25% at 0.8505 and a breakdown of 0.8487 (weekly low Jan.17) would expose 0.8454 (2020 low Jan.8) and then 0.8275 (2019 low Dec.13). On the other hand, the next up barrier lines up at 0.8595 (2020 high Jan.14) seconded by 0.8652 (100-day SMA) and finally 0.8778 (200-day SMA).

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