EUR/GBP: 0.8470 becomes bears’ favorite, EU/UK data in spotlight

• Brexit optimism command more market attention that the recent EUR uptick mainly because of the USD’s across the board weakness.
• Data concerning economic sentiment and employment can direct near-term pair moves.

EUR/GBP struggles around the intra-day low of 0.8540 during early Tuesday. The pair takes the support of Brexit optimism in order to counter the lack of big data from the EU. Next up in the trader’s radar will be the EU and German ZEW economic sentiment survey results coupled with the UK employment data.

Buying bets were in favor on Monday as upbeat EU trade balance figures confronted report that the UK PM Theresa May’s third Brexit proposal wasn’t entertained for Tuesday’s meaningful vote. With this, pushing Mrs. May now has to attend the EU summit with empty hands and a request for March 29 Brexit deadline extension.

Moving forward, investors may now concentrate on the British employment data up for 09:30 GMT ahead of the EU and German sentiment indices scheduled for release at 10:00 GMT.

The January month average earnings are expected to soften to 3.2% from 3.4% whereas average earnings excluding bonus may remain unchanged at 3.4%. Also, the unemployment rate could reprint 4.0% figure during the first month of 2019 while claimant count change might soften to 3.7K from 14.2K.

Elsewhere, German ZEW economic sentiment for March could improve to -11.3 from -13.4 but its EU counterpart is less likely to please the EUR buyers if matching -18.7 forecast versus -16.6 prior.

EUR/GBP Technical Analysis

Not only two-month-old descending trend-line, at 0.8640 now, but the immediate resistance-line figure of 0.8590 also challenges the EUR/GBP pair’s upside.  

As a result, chances of its pullback to the 0.8500 round-figure and then to current month low around 0.8470 can’t be denied. During the pair’s additional weakness under 0.8470, 61.8% Fibonacci expansion of its latest moves near 0.8425 can becomes bears’ favorite.