Following its intraday reversal off the 0.8332 level to close higher on Tuesday, the cross is now seen building on those gains in early trading today. This suggests that EURGBP could be building up strength to take a stab at the 0.8498 level, its Jan 14'2011 high. To resume its recovery, the cross will have to firmly break and hold above that level to create scope for strength towards the 0.8646 level, its Dec 31'10 high with a violation of there paving the way for more gains. Its daily RSI is supportive of this view. On the other hand, the risk to our analysis will be a return below the 0.8332 level which will open the door for further declines towards the 0.8284 level. Below that level if seen will resume its medium term weakness towards the 0.8200 level, its Sept 08'2010 low and subsequently the 0.8100 level.

EURGBP