EUR-GBP: Further Weakness Likely

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( fxtechstrategy.com) -- The euro-pound cross currency pair broke through the 0.8263 level on continued weakness, so further declines cannot be ruled out.

EUR-GBP likely will target its August 2010 low at 0.8141. A loss there will pave the way for more declines toward the pair's 2010 low at 0.8066.

EUR-GBP's daily relative strength index is bearish and pointing lower, supporting this view.

On the upside, the pair will have to make a return to more than 0.8423, its March 13 low, in order to reverse its current bear threats.

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If seen, this could force further upside toward 0.8504. A violation there would turn attention to EUR-GBP's Dec. 8 high at 0.8560. Further out, the 0.8616 level will come in as the next upside objective.

All in all, however, the cross currency pair faces further downside risks.

-- Written by Mohammed Isah.

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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 The Professional Suite 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.