After a deep correction of the initial 5-wave decline (wave-1) in Sterling prices again met strong resistance near1.6250 from the 2011 downtrend. Now a double top is forming with key neckline support at 1.5894. It is our viewthat this trendline resistance and double top are marking the top of wave-(d) of a larger multi-year triangle andwave-(e) lower is now underway. (daily)S/t, a small head & shoulders top has broken support at 1.6120 and is targeting further weakness to 1.5993.The ultimate wave-3 target (1.618X1) is lower at 1.5665 which is just below key support at 1.5750/20 so we wouldlook for prices to bounce from the 1.57 zone. Near-term resistance is now old support at 1.6120 and support is thetarget zone between 1.6020/1.5993. (hourly)Levels: Support – 1.6060, 1.6020, 1.5993 Resistance – 1.6120, 1.6165, 1.6207
Nomura