FxWirePro: EUR/GBP erases early gains, upbeat UK ILO employment data buoys pound

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading unchanged at 0.8833 at around 07:20 GMT, slips lower from session highs at 0.8848.

Previous Week's High/ Low: 0.8965/ 0.8823

Previous Session's High/ Low: 0.8874/ 0.8823

Fundamental Overview:

UK’s Unemployment Rate reprints the 3.7% figure for three months to December, inline with market expectations. 

January’s Claimant Count Change however, slumped to -12.9K versus -3.2K prior.

Further, UK wages excluding bonuses jumped by 6.7% YoY in December vs. 6.5% expected.

The gauge including bonuses came in at 5.9% 3Mo/YoY in December versus 6.5% previous and 6.2% expected.

The British pound caught fresh bids after UK employment data, pulling the pair lower from session highs.

Focus now on the preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data for the Eurozone for further directions.

Technical Analysis:

- EUR/GBP is extending weakness for the 7th consecutive session

- The pair has slipped below 21-EMA and upside remains capped at 5-DMA

- Momentum is bearish, Stochs and RSI are sharply lower

- Price action is below 200H MA and GMMA indicator has turned bearish on the intraday charts

- MACD confirms a bearish crossover on signal line adding to the downside bias

Major Support and Resistance Levels:

Support - 0.8828 (20-DMA), Resistance - 0.8846 (5-DMA)

Summary: EUR/GBP finds immediate support at 20-DMA. Technical bias for the pair is bearish. Watch out for break below 20-DMA for more weakness. Test of daily cloud support at 0.8770 likely.