EURGBP has formed lower highs and higher lows inside a symmetrical triangle pattern. Price is approaching the peak of the formation, so a breakout from consolidation could follow soon.

A move past the .8580 level could confirm that a rally of the same height as the chart pattern is underway. The triangle spans around 50 pips, possibly taking EURGBP up to the .8630 level next.

On the other hand, a break below support around .8560 could signal that a selloff of the same size is due. Technical indicators seem to be leaning towards a bullish break.

The 100 SMA is above the 200 SMA to show that the path of least resistance is to the upside or that support is more likely to hold than to break. The moving averages also line up with the triangle bottom to add to its strength as a floor.

Stochastic is still pointing up to show that buyers are in control, but the oscillator is closing in on the overbought zone to signal potential exhaustion soon. RSI has more room to climb, but this indicator appears to be simply moving sideways to reflect consolidation.

There are no major reports due from both the euro and pound this week, so any strong moves might hinge on market sentiment. Note that the euro tends to benefit from safe-haven flows more than the pound, so a return in risk-off flows could favor the shared currency.

Market attention on the Delta variant spread could be one factor propping up lower-yielding currencies, especially since more nations have been imposing and extending lockdown measures. There has also been some reports on yet another new variant emerging from South Africa that could prove to be contagious as well.

A relief rally, on the other hand, might favor the pound as traders are speculating that the BOE might be ready to trim stimulus soon.