EURGBP is still on a downtrend but the pair is currently testing the top of the descending channel visible on its 4-hour time frame. 

If resistance around the top of the channel or .7200 holds, the pair could move back to the bottom at .7000 or lower.

Stochastic is pointing down, which means that sellers are in control of forex price action. At the same time, RSI is also heading lower, adding confirmation that a selloff is possible.

The moving averages are mostly moving sideways and have been crossing back and forth, but the 100 SMA is currently below the longer-term 200 SMA so the path of least resistance is still to the downside. However, an upside break past the .7200 mark and onto .7300 could signal that a reversal is going on.

Eurogroup leaders are set to have more meetings today to discuss the details of Greece’s economic proposals. Over the weekend, the negotiations weren’t able to come up with a resolution for the debt crisis, even though the five-day ultimatum from the IMF has passed.

As for the UK, the BOE is set to print their credit conditions report today and an increase in lending activity could be positive for the pound. This could reassure traders that the BOE won’t need to increase their stimulus efforts in order to keep borrowing and spending activity supported.

The Greek parliament is set to have a meeting mid-week to come up with the necessary legislation to put the bailout reforms in action. However, the lack of agreement over the next few days could still undermine the idea of seeing a solution to the Greek debt crisis and remind traders that a default and euro zone exit are still possibilities.

By Kate Curtis from Trader’s Way