EURGBP-With continued upside failure the past week seeing the cross trading and closing lower for a second consecutive week on Friday, risk has turned to the 0.8970 level, its Nov 25’09 low with a loss of there turning attention to its Nov 17’09 low at 0.8832. The latter level is expected to cap declines if seen and turn the cross back up but if that snaps, we could see a resumption of its weakness started at the 0.9410 level and a deeper retracement towards its Sept 04’09 at 0.8704. This level preserves the cross’s recovery activated at the 0.8399 level and must hold to prevent a recapture of that level. Its weekly RSI remains supportive of its current downside as it is trending lower. To avert its current downside threats, EURGBP must break back above the 0.9064 and the 0.9150 levels there by creating scope for more upside gains towards the 0.9239 level, its Oct 26’09 high with a hold above that level targeting the 0.9410 level, its Oct 13’09 high. We remain bearish on this cross nearer term.
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