EURGBP- The bearish momentum triggered off the 0.9040 level, its 2011 high continues to push the cross lower closing lower the past week and threatening further declines. The immediate risk remains for the cross to weaken further towards its April 05’2011 low at 0.8715 with a breach of that level setting the stage for further weakness towards the 0.8653 level, its Mar 23’2011 high followed by the 0.8532 level and possibly the 0.8500 level, its psycho level.
A halt in weakness is expected at that level to turn EURGBP higher if tested. Both its daily and weekly stochastic is bearish and pointing lower suggesting further weakness. Alternatively, for the cross to restart its medium term uptrend presently on hold, a break and close above the 0.9040 level must occur to clear the way for further upside gains towards the 0.9147 level, its 2010 high and then its 2009 high at 0.9410. All in all, the cross may still be holding on to its broader medium term uptrend but now faces the possibility of further weakness on correction.
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