The range high failure on Monday followed with a sharp decline but the quick reversal has since seen a significant breakout. Sterling is now through bull flag resistance at 1.6250 and a downtrend line from 2011. These are bullish developments that negate our bearish outlook. (daily) Since the move down to 11/12 was corrective the rally since is expected to be an impulsive move. Waves-(1) and (2) are considered complete and prices are now in the most bullish, wave-3 of (3) position. Near-term channel resistance surfaces at 1.6350; the 1.618 extension target for wave-3 is 1.6405. Support is the 1.6250 breakout and then a recent pivot high at 1.6237. (hourly) Levels: Support – 1.6250, 1.6237, 1.6200 Resistance – 1.6328, 1.6350, 1.6405
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Nomura