EURGBP has been trending lower on its long-term charts, moving inside a descending channel and inching close to the resistance. Sellers might be waiting around the .8600 major psychological resistance.

Price already seems to be finding a ceiling at the 61.8% Fibonacci retracement level at .8565 and might be ready to resume the drop to the swing low near .8400 or the channel bottom. The 200 SMA also seems to be holding as dynamic resistance as well.

On the subject of moving averages, the 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside. In other words, resistance levels are more likely to hold than to break.

Stochastic is also indicating overbought conditions or exhaustion among buyers, so turning lower would mean that sellers are ready to take over.

There are no major reports due from both economies, but it’s worth noting that the BOE might be closer to tightening monetary policy than the ECB. Although this is mostly due to stagflation concerns, the prospect of higher borrowing costs in the UK economy could be bullish for the pound.

A handful of mid-tier UK reports are lined up today, including the preliminary GDP for Q3 and industrial production data. The UK economy likely grew 1.5% in the quarter, much slower than the earlier 5.5% figure, but an upside surprise might still be possible. Industrial production likely slowed from 0.8% to 0.2% in October while manufacturing production probably dipped from 0.5% to 0.2%.

As for the euro, the EU economic forecasts and the ECB Economic Bulletin are up for release today, but these don’t normally have a strong impact on the shared currency. Instead it might take cues from overall market sentiment, as a pickup in risk appetite tends to weigh on the lower-yielding euro.