FXstreet.com (Barcelona) - Sterling declined further away from 1.6625 high on Friday, to reach a fresh 6-week high at 1.6160 on Wednesday's U.S. session, and latter attempt to bounce up has been caped at 1.6250, below key level at 1.6265/80, according to David Solin, technical analyst at FXA.

Solin affirms that taking key support at 1.6265/80 could accelerate4 Pound's decline: Cable has turned lower, taking out key support at 1.6265/80 (both the base of the bullish channel since June and the Aug 17th low), and raising the potential for a further downside acceleration ahead. From an Elliott Wave perspective, note the series of subwaves over the last few weeks, and adds to the potential for a large tumble from here within wave iii of 3 in the fall from the Aug 5th high at 1.7040 (often the most explosive part of a larger cycle).

On a longer term perspective, Solin observes that a close below 1.6265/80, could shift the pair's bias from bullish to neutral: Longer term, a close below the 1.6265/80 support area (and potential for a downside resolution, see above) would pose just too much downside risk to maintain the longer term bullish bias that has been in place since March 27th at 1.4300, and would switch to neutral on such a close.

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