GBP/JPY Elliott Wave
Since our last analysis the GBP/JPY pair was trading in an upward move, impulsive (5) wave (coloured pink) of the bigger 3 wave (coloured blue) was developing. During the Friday’s European session we could observe strong ascending movement towards the 132.66 level and we can consider this move as the end of the impulsive 3 wave (coloured blue). Therefore, during the New York session this currency started pushing lower when development of the 4 wave started. Currently the GBP/JPY pair is trading around 131.30 level and we are expecting to see continuation of the bearish mood today. In accordance with our wave rules and taking into account that the wave 4 should retrace 38.2% of the wave 3, we can define the potential targets with measuring wave 3 with take profit at 130.82 (38.2% of wave 3). To reduce the risk, we can use invalidation at 132.80 level as stop loss.
Support and Resistance
(S3) 130.23 (S2) 130.90 (S1) 131.45 (PP) 132.12 (R1) 132.67 (R2) 133.34 (R3) 133.89
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 131.85 with stop loss 132.80 and take profit at 130.82 are recommended.