EUR/GBP recovers early lost ground, around 0.88 handle post UK jobs data

The EUR/GBP cross managed to recover early losses to weekly lows and is now eyeing to move back above the 0.8800 handle following mixed UK jobs data. 

The cross stalled its corrective slide from fresh yearly tops, touched at the beginning of this week, and caught some fresh bids near 0.8765 region after disappointing average weekly earnings growth data from the UK. Wage growth including bonuses surprised negatively, coming-in at 2.1% 3m y/y versus 2.3% previous and 2.4% expected, while the gauge excluding bonuses wages rose at 1.7% versus 1.8% last. Meanwhile, the number of people claiming jobless benefits increased by only 7.3k in May and the unemployment rate held steady at 4.6%.

   •  UK jobs mixed: Claimants count change upbeat, Wages disappoint

Against the backdrop of BoE's readiness to tolerate near-term inflation overshoot, until led by strong pick-up in wages, today's downbeat earnings data reinforced expectations that the central bank is unlikely to change its current accommodative monetary policy stance. Hence, Thursday's BoE monetary policy meeting might now turn out to be a non-event for the markets.

It. however, remains to be seen if the cross is able to gain any follow through traction beyond the 0.8800 handle amid mildly weaker tone surrounding the EUR/USD major.

Technical levels to watch

A follow through momentum above 0.8815 immediate resistance, the cross seems all set to aim back towards 0.8850 resistance area before eventually darting towards the 0.8900 handle 

On the downside, weakness below 0.8765 level (session low) is likely to get extended towards 0.8730-25 horizontal support ahead of the 0.8700 handle.