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EURGBP: Set To Strengthen Further In The New Week

EURGBP- The cross reversed almost all of its earlier gains for the week to close marginally lower on Friday.This is coming on the back of a halt in price declines at 0.8720 level on Thursday and its subsequent two-day rally.

This development has opened up further upside risk in the coming week with a possible move towards the 0.8843 level, its Jun 14’2011 high. Beyond that level will clear the way further strength towards its Jun 10’2011 high at 0.8920 and then its Jun 08’2011 high at 0.8976.

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Its daily RSI is bullish and pointing higher suggesting further gains. On the other hand, the risk to our analysis will be a return below the 0.8720 level, its Jun 16’2011 low.

This will create scope for more declines towards the 0.8610 level, its May 26’2011 low and possibly lower.

All in all, the cross has halted its recent declined and triggered a two-day recovery suggesting further strength.