EURGBP- Although the cross closed higher for a second week in a row the past week, it will have to break and hold above the 0.7961 level to resume its corrective recovery triggered from the 0.7761 level. This if seen will open the door for a run at the 0.8039/93 levels. We expect a back off lower at these levels but if broken, further upside pressure should build up towards the 0.8154 level. Its daily RSI is bullish and pointing higher supporting this view. On the downside, a failure to return above the 0.7961 level could see the cross face downside pressure towards the 0.7761 level. Below here will trigger the resumption of its broader medium term weakness towards the 0.7700 level. Further down, support lies at the 0.7691 level, its Oct 2008 low and next the 0.7594 level. All in all, the cross remains biased to the downside in the medium term though recovering.
