Pound's decline from 1.6412 high on December 16 has extended today to levels below 1.6000, dipping below the neckline of a head and shoulders formation shaped on intra-day charts, according to Ian Coleman, technical analyst at Turtle Index.On the downside, confirmation of the mentioned figure, could lead to a downtrend towards 1.5778, says Coleman: "4Hrs we can see the head and shoulders formation. We broke the neckline on the 17th of Dec then went back to retest again. We do have some wave counts here but they are very erratic, however, 261.8% would take us down to the base at 1.5778.
Euro recovery from Asian session low at 1.6260 has been short lived, as the pair, capped at 1.4330 high on early European session, has pulled back to levels below 1.4300 at the moment of writing.
On the downside, next support levels lie at 1.4260 (session low/Dec 18 low), and below here, 1.4210/20 and 1.4185 (Sept 4 low). On the upside, resistance levels lie at 1.4330/40 (session high), and above here Monday's high at 1.4375 and 1.4410 (Dec 18 high).
From a wider perspective, the downtrend targeting 1.4050/70 area remains intact, according to Stoyan Mihaylov, technical analyst at Deltastock.com: "Yesterday's slide couldn't break below 1.4260 low and current bias on the 1h. frame is neutral with a slightly bullish intraday outlook for 1.4370. On the larger frames, the downtrend is intact and the target remains in the 1.4150-70 area."
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