The British pound finally resumed indicated major downtrend from 1.7192 and broke below previous support at 1.3504 in mid-2016, indicated downside targets at 1.3500 and 1.3000 had been met, however, as cable found good support at 1.1476 and staged a rebound, suggesting initial consolidation above this level would be seen and recovery to 1.2500 and possibly 1.2775-80 cannot be ruled out but reckon upside would be limited to 1.3000 and resistance at 1.3445 should hold, bring another decline later. Below 1.2000 would bring weakness to 1.1700, then retest of 1.1476. Our preferred count remains that the rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is treated as wave (A), the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree circle wave B. The selloff from there is either a 5-waver with wave 3 ended 1.3504 and wave 4 has ended at 1.7192 or is another A-B-C decline (i.e. (A)-1.3500, (B)-1.7192, followed by a wave C selloff). In either case, bearishness remains for further fall, a break of 1.1476 support would extend weakness to 1.1200, then 1.1000 but reckon downside would be limited to 1.0500 and price should stay well above psychological support at 1.0000.
On the upside, whilst initial upside bias is seen for the rebound from 1.1476 to bring retracement to 1.2500 and then 1.2775-80, reckon upside would be limited to 1.3000 and resistance at 1.3445 should hold, bring another decline. Only above previous support at 1.3836 would abort and suggest a temporary low is formed instead, bring a stronger rebound to 1.4000 and later towards 1.44-45 level but price should falter well below resistance at 1.5018, bring another selloff in late 2017.
