EURGBP: Initiates Corrective Recovery

EURGBP: After tumbling off its Oct 26'09 high at 0.9239 and wiping its previous week gains at the end of last week, the cross was seen initiating a corrective rally off the 0.8950 low today. Although EURGBP is trading slightly above its immediate resistance at the 0.8996 level, its Oct 21'09 low, the challenge is for the cross to maintain its recovery and hold above there. Convincing holding above there will open up further upside risk towards the 0.9067 level, its Oct 28'09 high ahead of its Oct 27'09 high at 0.9134. Beyond the latter will pave the way for a run at the 0.9239 level. Unless this level is decisively violated, our outlook is for the cross to continue its broader corrective downside weakness started at the 0.9410 level towards the 0.8911 level, its hammer low printed on Friday initially with a loss of there resuming the mentioned correction targeting the 0.8837 level, marking its Sept 27'09 high and possibly lower toward its July 13'09 high at 0.8698. On the whole, though a corrective bounce has been initiated, its nearer term corrective weakness triggered off the 0.9410 level remains intact.

Daily Chart: EURGBP