• EUR/GBP stays in a consolidation phase at the start of the week.
• Investors await UK  jobs report and ECB's policy announcements.

Following the sharp upsurge witnessed earlier in the month, the EUR/GBP pair closed the previous week virtually unchanged and continues to have a difficult time finding direction on Monday. As of writing, the pair was down 0.05% on a daily basis at 0.8652.

Earlier in the day, the data published by Eurostat showed that the Construction Output in the euro area contracted by 2.1% on a monthly basis in February. This reading came in worse than the market expectation for an increase of 0.2% but failed to trigger a meaningful market reaction as investors remain on the sidelines ahead of key events.

On Wednesday, the UK labour market report will be looked upon for fresh impetus. Analysts see the ILO Unemployment Rate rising to 5.2% in February from 5%. A better-than-expected print coupled with the UK's reopening prospects could help the GBP find demand.

On Thursday, the European Central Bank (ECB) will announce the Interest Rate Decision and release the Monetary Policy statement.

EUR/GBP near-term outlook

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, thinks that EUR/GBP will come under pressure if it fails to break above the late February high at 0.8732.

“Initial support is offered by the 20-day ma at 0.8604 ahead of key support at 0.8471/65," Jones added. “Below 0.8465 we would have to allow for the 0.8314/.8239 major support zone to be reached (the December 2016, April 2017, December 2019 and February 2020 lows).” 

Additional levels to watch for