Selling pressure appears as the EURGBP currency pair drops from 0.85921, reversing its earlier recovery from a support line that has held for five weeks.

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• EUR/GBP takes offers to reverse early-day rebound from five-week-old rising support line.

The pair currently trades last at 0.85921.

The previous day high was 0.8633 while the previous day low was 0.8593. The daily 38.2% Fib levels comes at 0.8608, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8617, expected to provide resistance.

EUR/GBP slides 25 pips to refresh intraday low near 0.8585 heading into Tuesday’s European session. In doing so, the cross-currency pair takes clues from the upbeat UK average earnings while paying a little heed to the downbeat employment change and unemployment rate figures per the latest release from the UK National Statistics.

Talking about the latest UK jobs report, the headline Employment Change marks -66K figures for June versus 50K expected and 102K prior whereas the ILO Unemployment Rate jumps to 4.2% for three months to June compared to the market’s expectations of staying unchanged at 4.0%.

More importantly, the Average Earnings including and excluding bonuses for three months to June improves heavily and boosts the hawkish expectations from the Bank of England (BoE), which in turn seems to have drowned the EUR/GBP price.

On Monday, the UK’s Chartered Institute of Personnel and Development (CIPD) released details of their latest survey while stating that the human resources executives expected to increase basic pay rates by a median of 5% – unchanged from the previous two quarters and the joint-highest readings since the survey started in 2012, per Reuters. The news increases the hawkish bias about the BoE after the upbeat UK growth numbers published the last week.

On the other hand, Germany’s Wholesale Price Index (WPI) for July edged higher to -2.8% YoY from -2.9% previous readings but came in softer than -2.6% expected. However, the monthly WPI figures reprinted the -0.2% MoM numbers versus -1.4% market forecasts.

Following the data, the German Economy Ministry noted that current early indicators do not yet point to a sustainable economic recovery in the coming months, per Reuters. The report, however, also added that the expected cautious recovery in private consumption, services and investment is showing the first signs of hope, which are likely to strengthen as the year progresses.

It’s worth noting that the Euro’s ability to cheer the US Dollar’s retreat from a five-week high, especially ahead of the mid-tier sentiment numbers from the ZEW Institute, puts a floor under the EUR/GBP price. Moving on, ZEW Economic Sentiment numbers for Germany and the Eurozone will be crucial for clear directions.

A clear U-turn from the 100-DMA resistance, around 0.8665 by the press time, joins the looming bear cross on the MACD and a steady RSI (14) line to keep the EUR/GBP pair sellers hopeful despite the latest moves.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8602 at the time of writing. Pair opened at 0.8596 and is trading with a change of 0.07% % .

The pair is trading below its 20 Daily moving average @ 0.8611, above its 50 Daily moving average @ 0.8588 , below its 100 Daily moving average @ 0.8667 and below its 200 Daily moving average @ 0.8723

The previous day high was 0.8633 while the previous day low was 0.8593. The daily 38.2% Fib levels comes at 0.8608, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8617, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8582, 0.8567, 0.8542
• Pivot resistance is noted at 0.8622, 0.8647, 0.8662

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