EURGBP Uptrend Correction (Sep 07, 2017)

Price is still inside an ascending channel visible on the 4-hour time frame and is moving closer to testing support around the .9100 major psychological level. 

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. This means that the uptrend is more likely to resume than to reverse. The 200 SMA dynamic support lines up with the 50% Fibonacci retracement level around the bottom of the channel. 

Stochastic is also indicating oversold conditions and is turning higher to indicate a return in bullish momentum. If that happens, price could make its way up to the swing high around .9300 or even create new highs closer to .9350. 

Another batch of weaker than expected reports came from the euro zone, leading traders to price in cautious remarks from the ECB in their upcoming policy statement. German factory orders fell 0.7% instead of posting the projected 0.2% uptick while the region's retail PMI fell from 51.0 to 50.8. Italian retail sales were down 0.2% as expected.

There were no major reports out of the UK economy yesterday while today has only the Halifax HPI on tap. Brexit-related updates could continue to drive pound price action in the next few days, particularly since the second reading of the EU repeal bill is scheduled this week. 

By Kate Curtis from Trader's Way