FxWirePro: EUR/GBP Extends Declines Post UK Labour Market and Household Confidence Data, Hits Session Lows at 0.7892
- Number of people in UK claiming unemployment benefits increased by 6,700 in March, the first rise since August 2015.
- Unemployment rate held steady at 5.1%, but the actual number of unemployed rose for the first time since July 2015, up 21,000 in the three months to Feb.
- UK households grow more worried about job security, inflation and interest rates. Higher inflation perceptions now see one-in-four households expecting rates to start rising within the next six months – the highest proportion since January.
- EUR/GBP is slipping as we write, the pair hit session lows of 0.7892 and has pared some losses to currently trade at 0.7897.
- The pair finds strong channel base support at 0.7875, breaks below could see weakness upto 0.7775 (cloud top). Momentum studies are bearish.
- Resistance is seen at 0.7919 (5-DMA) ahead of 0.7925 (April 19th highs).
- Focus now on the ECB governing council meeting on Thursday. While no changes to policy are expected, markets will still be paying close attention to the statement and the comments in President Draghi’s accompanying press conference.
- Foreign exchange markets will be particularly interested to see if Draghi reiterates that the ECB does not expected to reduce rates any further following the measures introduced last month.