EUR/GBP consolidates above 0.8400 mark, looks to UK jobs data for fresh impetus

• EUR/GBP extends its sideways consolidative price move in a one-week-old range.
• The divergent BoE-ECB expectations support prospects for some meaningful gains.
• Traders keenly await UK monthly employment details for short-term impetuses.

The EUR/GBP cross ticks lower during the Asian session on Tuesday, though it lacks follow-through and remains confined in a familiar range held over the past week or so. Spot prices hold above the 0.8400 mark as traders now look forward to the UK jobs data for some meaningful impetus and positioning for a firm intraday direction.

The ILO Unemployment Rate is expected to edge higher from a three-year high level of 4.5% registered in the previous month to 4.6% during the three months to April. Adding to this, a further slowdown in the UK wage growth would point to signs of a cooling labour market and place more pressure on the Bank of England (BoE) to ease its monetary policy. This, in turn, is seen as a key factor undermining the British Pound (GBP) and acting as a tailwind for the EUR/GBP cross.

Meanwhile, inflation in the Eurozone fell below the European Central Bank's (ECB) 2% target for the first time since September 2024 in May, fueling speculation about further monetary easing. However, ECB  President Christine Lagarde last week hinted that interest rates are nearing their neutral level, pointing to the end of the rate-cutting cycle. This might contribute to the Euro's (EUR) relative outperformance against the GBP and favor the EUR/GBP bulls.

However, the recent range-bound price action above a technically significant 200-day Simple Moving Average (SMA) might still be categorized as a bearish consolidation phase against the backdrop of a sharp fall from the year-to-date high touched in April. This, in turn, makes it prudent to wait for strong follow-through buying before positioning for any meaningful upside.