EURGBP- With a hammer formation triggering a strong bearish close the past week, risks of further declines are now seen as we enter a new week. This development has opened up further downside pressure towards its Jan 19’2011 low at 0.8376 where a violation will open the door for a run at the Jan 19’2011 low at 0.8332. Further weakness if seen will aim at the 0.8284 level, its 2011 low. We expect that level to provide a strong support and possibly turn the cross back up but if that fails, further declines are likely towards the 0.8200 level followed by the 0.8100 level. Its weekly RSI is bearish and pointing lower supporting this view. Alternatively, a break and hold above the 0.8671 level will have to occur to reverse its present downside pressure and bring gains towards its Nov 08’10 high at 0.8690 with a clearance of that level aiming at the 0.8816 level.
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