EURGBP- With a reversal of its Friday weakness seen on Monday and a follow through higher cutting through the 0.8735/38 levels, risk of continued upside recovery is likely. This development leaves the cross targeting its Sept 21’2011 high at 0.8794 as the next upside objective with a violation of there pushing EURGBP further higher towards the 0.8881 level, its Aug 31’2011 high. We expect this zone to pose a strong resistance and probably turn the cross back down but if broken, further strength should build up towards the 0.9083 level, its Jun 01’2011 high. Further out, resistance stands at the 0.9150 level, its Feb’2010 high. Alternatively, the risk to its present corrective upmove will be a return to the 0.8530/28 zone. Below here will resume its medium weakness towards the 0.8460 level, its Mar’2011 low and subsequently the 0.8355 level, its Feb’2011 low. All in all, the cross maintains an immediate upside risk on correction.
