Search ForexCrunch

   “¢   Quickly reverses an early dip led by an unexpected fall in the UK unemployment rate.
   “¢   Mostly positive Euro-zone macro releases do little to provide any additional boost.

The EUR/GBP cross held on to its weaker tone, albeit has managed to recover around 20-pips from the UK jobs data-led knee-jerk slide to sub-0.8900 level, or over one-week low.

The cross extended last week’s retracement slide from a 10-month high, levels beyond the key 0.9000 psychological mark, and traded with a negative bias for the third session in the previous four. The selling pressure aggravated after the latest UK labour market report showed that the unemployment rate unexpectedly dropped to 4.0% during the past 3 months to July.  

The downfall, however, was quickly bought into after detail revealed that average weekly earnings (including bonuses) registered a growth of 2.4% 3m/y as compared to 2.5% anticipated and the number of people claiming jobless benefits rose by 6.2k in July.  

Meanwhile, better-than-expected Euro-zone macro data, showing that region’s economic growth stood at 0.4% during the second-quarter of 2018, did little to provide any additional boost.  

With today’s key UK/EZ economic data out of the way, it would now be interesting to see if the cross is able to find any fresh buying interest amid growing prospects for a no-deal Brexit.

Technical levels to watch

The 0.8900-0.8895 region might continue to act as an immediate support, which if broken might prompt some additional long-unwinding trade and drag the cross further towards mid-0.8800s.

On the flip side, any up-move now seems to confront immediate resistance near the 0.8940-45 region, above which the cross is likely to aim back towards reclaiming the 0.9000 handle.