Start at Mournhold Wayshrine and enter the city. Go to the merchant square (scale icon) and follow the road going west out of the city but don’t cross the bridge. Instead, follow the right river bank north and you will see twin waterfalls. At the base of the right one (the eastern one) is where you’ll find this shard.
Central Deshaan, North-northeast of Mournhold Wayshrine. In Mournhold.