EURGBP has been moving sideways on its 4-hour time frame, finding support at the .7100 major psychological level and resistance at the .7400 major psychological level. The moving averages are also moving sideways, indicating that price could stay in range for quite some time.
Stochastic is pointing down, confirming that a move towards the range support might take place. If the bottom of the range holds as support, price could bounce back to the top again. RSI is also heading lower, indicating that euro bears are in control of price action for now.
The path of least resistance is to the downside, as the Greek debt talks continue to weigh on the euro. There has been no deal reached yet so far, increasing the odds of a debt default and a potential exit from the euro zone. Greek government officals and their creditors are set to have another meeting this week and the outcome could set the tone for euro trading.
Confirmation that Greece might default on its debt this month would be bearish for the shared currency since it will put the stability of the euro region in question. Apart from that, the euro nations that loaned money to Greece will not get paid and might suffer huge losses themselves.
Meanwhile, data from the UK has been mostly weaker than expected, although the headline and core CPI came in close to consensus. Headline CPI showed a 0.1% uptick as expected while core CPI showed a 0.9% increase, lower than the projected 1.0% rise but higher than the previous 0.8% figure.
For today, UK jobs data and the BOE meeting minutes could determine where the pound might be headed. The jobs report could show a 12.5K increase in hiring while the BOE minutes might still show a unanimous vote to keep interest rates and asset purchases unchanged.
By Kate Curtis from Trader’s Way