• EUR/GBP faces stiff pressure near 0.8540 ahead of UK data.
• BoE Bailey is expected to provide fresh guidance on interest rates.
• The ECB would ease key rates before the BoE.

The EUR/GBP pair faces pressure while attempting to extend recovery above the immediate resistance of 0.8540 in the European session on Monday. The cross is expected to remain on the tenterhooks as investors await the United Kingdom Employment data for three months ending December, which will be published on Tuesday.

Investors anticipate that the Unemployment Rate falls to 4.0% from 4.2% in three months ending November. In the same period, the Average Earnings, Excluding bonuses, are forecast to have grown at a slower pace of 6.0% against the former reading of 6.6%. A sharp decline in wage growth momentum would prompt expectations of rate cuts by the Bank of England (BoE).

In today’s session, the speech from BoE Governor Andrew Bailey will be the focus. BoE Bailey will provide cues about likely monetary policy action in March.

The Pound Sterling is expected to remain volatile as the UK’s inflation, factory, and retail sales data are lined up for release after Tuesday’s Employment data.

The broader appeal for the Euro is weak against the Pound Sterling as investors hope that the European Central Bank (ECB) will start reducing key rates earlier than the BoE. Price pressures in the Eurozone economy are consistently declining. However, ECB policymakers will ensure that inflation will sustainably return to the 2% target before announcing rate cuts. ECB President Christine Lagarde anticipated that the central bank should consider rate cuts in late Spring.