FX.co ★ Elliott wave analysis of GBP/JPY for January 3, 2019

GBP/JPY collapsed in overnight trading and tested 131.43 as the low. This was just below the equality target between wave C/ and A/, which was seen at 132.78. This indicates wave B likely has completed and a new impulsive rally is developing to above 156.61.

Short-term, we do expect a minor set-back to 132.78 before the next rally higher towards 139.91 and above to confirm that a long-term low has been seen and a new impulsive rally is developing.

R3: 135.31

R2: 134.65

R1: 134.25

Pivot: 133.86

S1: 133.64

S2: 132.78

S3: 132.35

Trading recommendation:

We will buy GBP upon a break above 134.62