Like Euro, both the weekly and daily trends have turned down in Sterling and prices are breaking below the July uptrend as well. There is now only minor support at 1.6310 ahead of a continuation lower. The larger pattern from July shows a completed 5-wave rally below Major resistance at 1.6750 that stretches back to 2011. The last 2 weeks have traced bearish shooting stars; below 1.6400 this weeks confirms. There is a large consolidation zone between 1.6260/1.59 that can offer support as a new downtrend unfolds. Within that range there are two Fibonacci retracement zones (6070 & 5900) that suggest support will developp at those key confluence levels. New resistance is 1.6475 with support at 1.6310. Conviction: Medium Trade: Flat. Levels: Support – 1.6310, 1.6260, 1.6070 Resistance – 1.6414, 1.6475, 1.6526
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Nomura