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• The EUR/GBP price has formed a double-bottom pattern on the 4H chart.
• The UK published robust jobs numbers as wages continued rising.
• The Bank of England will likely continue hiking interest rates.

The euro to pound (EUR/GBP) exchange rate continued the downward trend on Tuesday. The pair dropped to a low of 0.8550, a few points below last month’s high of 0.8656. It has dropped by over 4.8% from the highest point this year.
 

UK labor market is still strong

The EUR/GBP pair has been in a strong bearish trend in the past few months while the GBP/USD rate jumped to the highest level in 15 months. The most recent GBP news was the latest UK jobs numbers.

Economic data published by the Office of National Statistics (ONS) showed that the economy added over 102k in three months to May. This increase was a few points below the median estimate of 125k.

Wage growth continued rising in May. The average earnings ex bonus jumped by 7.3%, higher than the median estimate of 7.1%. Average earnings plus bonus rose by 6.9%, higher than the median estimate of 6.8%. The unemployment rate came in at 4%.

These numbers mean that the British labor market is strong, with many companies struggling t find workers. At the same time, the country is going through a major cost of living crisis, with inflation being at 8.7%.

Therefore, economists expect that the Bank of England (BoE) will continue hiking interest rates. Most of them see it hiking rates by 0.25% to 5.0%. 

The other important EUR/GBP news on Tuesday was the latest German inflation data. According to the statistics agency, the headline consumer price index (CPI) rose by 0.3% in June after falling by -0.1% in May. Inflation rose by 6.4% on a year-on-year basis.
 

EUR/GBP technical analysis

(Click on image to enlarge)

EURGBP chart by TradingView

The EUR to GBP price has been in a bearish downward trend in the past few months. After peaking at 0.8656 in June, the pair retreated to a low of 0.8520 last week. The pair has moved below the 25-period and 50-period moving averages. It has dropped below the Ichimoku Cloud indicator.

Meanwhile, the MACD indicator has drifted upwards. It is now forming a double-bottom pattern whose neckline is at 0.8656. Therefore, more downside will be confirmed if the price moves below the support at 0.8520. A move below that support will open the possibility of it falling below 0.8500.

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