untitled design

EUR/GBP loses stability on European election turmoil, but weak UK labor market limits losses

  • EUR/GBP falls to its lowest levels in nine months as EU elections shake the Euro.
  • Sterling bidders pay special attention to UK GDP after weak jobs data.
  • A flurry of speeches from the ECB are expected throughout the week.

EUR/GBP lost weight on Tuesday, extending recent losses and falling by a third of a percent as turbulent EU parliamentary elections destabilize European markets. UK jobs data disappointed with a rise in jobless claims, and Sterling traders will be keeping an eye on the UK Gross Domestic Product (GDP) update on Wednesday.

A surge in support for center-right to far-right political parties during the European parliamentary elections has shaken market stability in Europe this week. France has called early elections after a big shift in the key European country’s voter base, as French President Emmanuel Macron sees his support among voters evaporate. France will return to the polls in a two-round election to select a new government on June 30 and July 7.

The European Central Bank (ECB) recently delivered a long-awaited rate cut, but policymakers are broadly warning that a further rate cut may not be in the cards unless economic data deteriorates further. Several mid-level appearances from ECB bosses are expected throughout the week.

UK jobs figures missed expectations on Tuesday, with the 3-month ILO unemployment rate unexpectedly rising to 4.4% in April against a forecast of holding at 4.3%. The change in May’s applicant count also soared to 50,400 versus the expected 10,200, while the previous month saw a slight revision to 8,400. An increase of 50,400 new unemployment claims represents the worst monthly increase in unemployment benefit seekers since March 2021.

GBP traders will be keeping an eye on the UK GDP release on Wednesday, which is forecast to remain at 0.0% MoM compared to 0.4% previously.

economic indicator

Gross Domestic Product (MoM)

The Gross Domestic Product published by National Statistics It is a measure of the total value of all goods and services produced by the United Kingdom. GDP is considered a broad measure of economic activity in the United Kingdom. Generally speaking, an uptrend has a positive effect on the pound, while a downtrend is seen as negative (or bearish).

EUR/GBP Technical Outlook

EUR/GBP has broken out of recent consolidation to test multi-month lows as the Euro plunges against the British Pound. The pair fell to 0.8420 before finding a brake, but the bullish recovery remains limited as EUR/GBP struggles with price action below 0.8460.

Tuesday’s declines are just a culmination of the recent bearish pressure pushing the pair lower. EUR/GBP has closed flat or lower for four consecutive weeks, and is firmly on track for a fifth. The 200-day EMA is turning bearish from 0.8617, and any bullish recovery will be met with familiar technical consolidation levels above the 0.8500 area.

EUR/GBP Hourly Chart

EUR/GBP Daily Chart

EUR/GBP

Summary
Latest price today 0.843
Today’s daily change -0.0026
Daily change % today -0.31
Today’s daily opening 0.8456
Trends
SMA20 Journal 0.8523
SMA50 Daily 0.8553
SMA100 Journal 0.855
SMA200 Journal 0.86
Levels
Previous Daily High 0.8491
Previous Daily Low 0.844
Previous Weekly High 0.8536
Previous Weekly Low 0.8489
Previous Monthly High 0.8621
Previous Monthly Low 0.8484
Daily Fibonacci 38.2% 0.846
Daily Fibonacci 61.8% 0.8472
Daily Pivot Point S1 0.8434
Daily Pivot Point S2 0.8411
Daily Pivot Point S3 0.8383
Daily Pivot Point R1 0.8485
Daily Pivot Point R2 0.8514
Daily Pivot Point R3 0.8536

Source: Fx Street

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular