As the EURGBP extends the advance carried over from the previous week, we’re seeing the relative strength index quickly approach overbought territory, and the European Central Bank (ECB) and Bank of England (BoE) interest rate decisions may serve as the fundamental catalyst to spark a sharp reversal in the exchange rate. Beyond the rate announcement, dovish rhetoric from President Mario Draghi may drag on the euro should the central bank head hint at further monetary support, while the BoE may refrain from releasing a policy statement as the Monetary Policy Committee (MPC) maintains a neutral policy stance. In turn, we will wait for a reversal in the RSI for confirmation, and will preserve our bearish forecast for the pair as it appears to be carving a lower top ahead of 0.8140-50, the 0.786% Fib from 2008 low to the 2009 high.
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