EURGBP was under selling pressure and hit the daily low after mildly strong UK Employment Data. The U.K. employment increased by 208k in November with the unemployment rate steady at 3.8%. Increased hiring activity came with higher headline wage growth at 3.2% beating forecasts of 3.1%. The stronger UK employment data might provide some relief to hawkish pressures for the Bank of England. The release of PMIs next Friday might provide the catalyst for the Bank of England’s upcoming policy decision.
On the other side of the fx pair equation, the ZEW Survey for Economic Sentiment came in at 26.7 above expectations of 15 in January. The ZEW Survey for the Current Situation came in at -9.5, beating forecasts of -13.5 in January. EURUSD on the news recovered some of the previous losses.
EURGBP dropped to daily lows at 0.8501 and managed to rebound after the release of stronger ZEW survey. The British pound was under pressure as investors increase bets that Bank Of England will proceed to a 25 basis point rate cut in January. Employment data today might cancel the rate cut for a later meeting.
On the downside, first support level for the pair stands at 0.8501 the daily low. Next level to the downside for bears would be the January 9th low at 0.8467. If the GBPUSD pierce below that level then the next support will be met at 0.8357 the low from December 17th.
On the other hand, initial resistance for EURGBP will be met at 0.8534 the daily top. The next obstacle to the upside stands at 0.8553 the high from yesterdays trading session. A break above that hurdle will open the way for the next resistance at 0.8596 the high from January 14th.