By Mohammed Isah of fxtechstrategy.com
: The pair's continued upside failure this past week saw it close lower for a second straight week.
To see a chart of the cross currency pair,
Risk has turned to the 0.8970 level, the pair's Nov. 25 low. A loss there would turn attention toward the Nov. 17 low at 0.8832. If the pair reaches the latter level, it's expected to turn back up, but if that level fails, we could see a resumption of the weakness that began at 0.9410 and a deeper retracement toward the Sept. 4 low at 0.8704.
The 0.8704 level preserves the pair's recovery activated at 0.8399. The 0.8704 level must hold to prevent a recapture of 0.8399.
The weekly relative strength index remains supportive of pair's current downward trajectory.
In order to avert its current downside threats, EUR-GBP must break back above the 0.9064 and the 0.9150 levels. That would create the potential for further gains toward the 0.9239 level, the pair's Oct. 26 high. A hold above there would allow the pair to target 0.9410, its Oct. 13 high.
We remain bearish on this cross currency pair nearer term. On the whole, threats remain lower toward the 0.8970/0.8832 levels now that the pair has lost upside momentum at 0.9094.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.