EURGBP continues to trend lower as it moves inside a falling channel on its daily time frame. Price is currently testing the channel top which lines up with the .8400 major psychological mark.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The 100 SMA also lines up with the channel top to add to its strength as a ceiling.

Stochastic is already in the overbought zone to signal exhaustion among buyers, but the oscillator has yet to turn lower to confirm a return in selling pressure. If that happens, EURGBP could dip back to the support levels at the channel bottom around .8200 or the mid-channel area of interest closer to .8300.

RSI has a bit more room to climb before reflecting overbought conditions, so EURGBP might follow suit The 200 SMA might be the line in the sand for a correction from the slide, as a break above this could set off a reversal.

EURGBP could take cues from the BOE decision later in the week, as a rate hike of 0.25% is eyed. No changes to the level of asset purchases are expected.

If the BOE signals that they’re ready to continue their tightening cycle despite global uncertainties, the pound might be in for stronger gains. On the other hand, shifting to a more cautious stance could spur downside for the U.K. currency.

There are no major reports due from the eurozone, so the shared currency might be pushed around by market sentiment. Note that the Fed decision is coming up, and a pickup in safe-haven flows might still benefit the lower-yielding euro.

The FOMC is expected to hike rates by 0.25% and announce balance sheet reduction details, along with updated economic forecasts.