Sterling has serve to tumble technicals show

Mon Mar 1, 2010 8:16am EST Related News FOREX-Euro slips vs dollar, weighed by weak sterlingMon, Mar 1 2010Sterling stays pressured on weak UK outlookFri, Feb 26 2010Sterling extends lows; euro rises 1 pctMon, Feb 1 2010

* Sterling in technical downtrend vs euro, dollar

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* Euro/sterling target 92.40, analysts say

* Sterling tentative support at $1.4855, then $1.4755

By Tamawa Desai

LONDON, March 1 (Reuters) - Sterling, which tumbled tomulti-month lows against major currencies on Monday on aflagging economy and political uncertainty, has further room todecline, particularly against the euro, technical analysts say.

Analysts said euro/sterling was in a bullish trend after thepair closed last week above the 55- and 200-day moving averages.

On Monday, the euro broke through resistance at 90.10 pence,a 50-percent retracement of the October 2009 to January 2010sell-off, and extended gains above the December 2009 high of90.55 pence.

Analysts see a break above that level clearing the waytowards 92.30/40 pence.

"Sterling is in trouble and we suspect it will fall furtherin the coming weeks," analysts at Barclays Capital said.

Analysts at Commerzbank eyed a long-term target of a13-month support line at 92.28 pence after the euro"s break ofthe December 2009 high.

The euro rose to a four-month high against the pound of91.50 pence EURGBP=D4 by midday in Europe on Monday. It waslast at 90.76 pence, up 1 percent on the day.

On a trade-weighted basis, the pound fell to 76.5 =GBP,its lowest since late March last year.

Against the dollar, analysts saw tentative support at the$1.4855 level, the 61.8 percent retracement of the 2009 rally.

Below that, Societe Generale said the pound could findtentative support at $1.4755. Others saw a further test of$1.4660, near its March 2009 high.

Sterling was last at $1.4880 GBP=D4, down 2.4 percent onthe day, after dipping to $1.4781, its lowest since early Maylast year.

Data last Friday showed traders increased their sterlingshort positions for the week ended Feb. 23. [ID:nN26199092]

But others cautioned against chasing the downside too far.

"Cable (sterling/dollar) is more oversold than it has beensince October 2008 as is bearish momentum. Be very careful asthis is a mature move already," said Nicole Elliott, technicalanalyst at Mizuho Corporate Bank, in a note.

(Additional reporting by Neal Armstrong and Naomi Tajitsu,editing by Nigel Stephenson)

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