EUR/GBP drops to session low after UK jobs data

After initially struggling to find direction, the EUR/GBP cross failed to build on to its Tuesday's up-move and headed lower after the release of better-than-expected UK jobs report. 

Currently trading at session low near 0.8370 region, the pair attracted fresh offered at higher levels and has now erased over 50% of its gains recorded in the previous trading session. 

According to the employment details released by the Office for National Statistics on Wednesday, the number of people claiming unemployment-related benefits in the UK rose by meager 400 while the unemployment rate delivered a positive surprise and ticked lower to 4.9% as compared to 5.0% recorded in the previous month. 

Meanwhile, the growth in earning, excluding bonuses, fell slightly to 2.2% from previous month's 2.3%, while including bonuses the average wage growth jumped to 2.3% from 2.0% recorded previously.

Immediately after the release, the pair turned lower. However, ahead of Thursday's ECB meeting and given the prospects of further monetary easing by BOE, the pair seems unlikely to witness sharp downslide.

Technical levels to watch

A follow through selling pressure below 0.8370-65 horizontal support, the pair seems to extend its slide back towards 0.8300 handle ahead of the recent swing lows support near 0.8250 region. Meanwhile on the upside, 0.8435-40 now seems to cap immediate upside, which if cleared should now assist the pair to resume its near-term bullish traction and lift it immediately towards 0.8500 psychological mark.