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11 Sep 2013
EUR/GBP tumbles on solid UK labor data
FXstreet.com (Athens)- The EUR/GBP collapsed after outstanding UK labor data released, driving the pair well below 0.8400.
EUR/GBP breaks 0.8400 support on much better than expected UK labor data
The EUR/GBP was hovering around 0.8427 before the UK labor data release, but as soon as the data released showed a significant drop in the jobless claims (-32.6K versus -21.0K expected), the pair broke the crucial support of 0.8400 area, touching a daily low as of 0.8382 (the lowest level since the late of January). However, the unemployment rate released a bit lower at 7.7%. This is of significant importance, since the Bank of England has set an intermediate target of the unemployment rate at 7% before policy tightening would be considered. Elaborating on, we remind that Carney’s new policy, is of a similar approach to the Fed (with caveats) in the US, where a 6.5% rate is cited.
Technical outlook on EUR/GBP
The fall is sterling positive, bringing forward hopes of the first tightening. However, this is a far-fetched target yet, as the unemployment rate released just a bit lower at 7.7%. The FXstreet.com Trend Index shows the pair to be slightly bearish and oversold in a 15-minutes time framework. Daily pivot point support can be found at 0.8400, 0.8395, 0.8374, and resistance at 0.8444, 0.8466, 0.8487, respectively.
EUR/GBP breaks 0.8400 support on much better than expected UK labor data
The EUR/GBP was hovering around 0.8427 before the UK labor data release, but as soon as the data released showed a significant drop in the jobless claims (-32.6K versus -21.0K expected), the pair broke the crucial support of 0.8400 area, touching a daily low as of 0.8382 (the lowest level since the late of January). However, the unemployment rate released a bit lower at 7.7%. This is of significant importance, since the Bank of England has set an intermediate target of the unemployment rate at 7% before policy tightening would be considered. Elaborating on, we remind that Carney’s new policy, is of a similar approach to the Fed (with caveats) in the US, where a 6.5% rate is cited.
Technical outlook on EUR/GBP
The fall is sterling positive, bringing forward hopes of the first tightening. However, this is a far-fetched target yet, as the unemployment rate released just a bit lower at 7.7%. The FXstreet.com Trend Index shows the pair to be slightly bearish and oversold in a 15-minutes time framework. Daily pivot point support can be found at 0.8400, 0.8395, 0.8374, and resistance at 0.8444, 0.8466, 0.8487, respectively.