EURGBP- The cross continues to maintain its downside vulnerability selling off sharply at the end of week and opening the door for further weakness towards the 0.8530 level, its Sept’2011 low. EURGBP has been under pressure since tumbling off the 0.8792 level on Sept 23’2011 following its recovery failure. A decisive clearance of the 0.8530 level will resume its medium term weakness towards the 0.8460 level, its Mar’2011 low and then the 0.8355 level, its Feb’2011 low. Its daily and weekly RSI are bearish and pointing lower supporting this view. Alternatively, the cross may still be trading and holding within its established rising channel (weekly chart) but will have to convincingly break and hold above the 0.8794 level, its Sept 21’2011 high and the 0.8885 level, its Aug 10’2011 high to end its current bear threats and target the 0.9083 level, its Jun 01’2011 high. Further out, resistance comes in at the 0.9150 level, its Feb’2010 high. All in all, with EURGBP ending the week lower on a reversal of its recovery gains, further downside risk is now building up on the 0.8530 level.

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