The rebound in the British pound from 1.6113 suggests the first leg of decline from 1.7044 has ended there and consolidation within 1.6113-1.7044 would take place with mild upside bias and although gain to 1.6688 (61.8% Fibonacci retracement of 1.7044 to 1.6113) cannot be ruled out, upside should be limited to 1.7000 and as long as 1.7044 holds, another decline would take place later this month.Our preferred count on the daily chart is that the major decline from 2.1162 top (9 Nov, 2007) is a 5-waver with wave 1: 1.9337, 2: 2.0399, extended wave 3 has ended at 1.3500 and wave 4 is unfolding with A: 1.4986, B: 1.3655 and impulsive wave C is sub-divided into (i): 1.5068, (ii): 1.4398, (iii): 1.6745, (iv): 1.5983 and wave (v) has ended at 1.7044.
On the downside, below 1.6320/30 would bring test of said support at 1.6113, however, break there is needed to add credence to our bearish count and bring further fall to 1.6000, however, only a daily close below 1.5983 support would confirm the view that the entire rise from 1.3500 has ended at 1.7044 and bring weakness towards 1.5802 support, then 1.5690 (38.2% Fibonacci retracement of entire rise from 1.3500 to 1.7044).In the event cable rises above 1.7044 resistance, this would signal the final wave (v) is still unfolding and gain to 1.7200 would follow and possibly towards 1.7528 (50% projection of wave (i) to (iii) measuring from wave (iv) tough) but this wave (v) as well as wave 4 should still falter below 1.7893 (61.8% projection) bring wave 5 selloff probably in Q4.
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