EUR/GBP spikes to session high after UK jobs data

After yesterday's failed attempt to sustain recovery back above 0.85 psychological mark, the EUR/GBP cross regained traction on Wednesday following the release of UK jobs data.

Currently trading around 0.8490 region, the cross caught fresh bids after data released from the UK showed the number of people claiming unemployment-related benefits unexpectedly fell by 42.K in January, while the unemployment rate held steady at 4.8%. 

Market participants, however, were disappointed by lower-than-expected growth in average earnings, coming-in at 2.6% 3m/yr for December. The miss in earnings growth might have faded expectations of further rise in inflationary pressure and attracted some fresh selling pressure around the British Pound. 

Further upside, however, might be restricted as investors remained reluctant to buy the shared currency amid growing concerns about France's presidential election and Greek bailout talks. 

Technical levels to watch

A follow through selling pressure below Jan. monthly lows support near 0.8450 support is likely to accelerate the slide towards 0.8400 handle, en-route its next major support near 0.8375-70 horizontal level. 

On the upside, momentum above 0.8500 handle could get extended back towards 0.8520-25 strong resistance, which if cleared has the potential to lift the cross back towards 0.8550 horizontal resistance ahead of 0.8585 resistance area.