FX.co ★ Elliott wave analysis of GBP/JPY for August 2 - 2019

A hard Brexit and now more trade sanctions against China from the US was more than the GBP/JPY cross could handle. Not only has the decline broken below 130.61, but it has accelerated lower. The break below 130.61 has invalidated our previous preferred count, and we are back to the drawing board looking at our alternate options.

We think that the corrective decline from early February 2018 high at 156.61 now has a little more downside to cover. The new ideal downside target is seen at 127.93 which we expect to mark the low of wave 2 and set the stage for a new impulsive rally. For now, a little more downward movement towards 127.93 should be expected.

R3: 130.70

R2: 130.41

R1: 129.91

Pivot: 129.80

S1: 129.47

R2: 129.00

R3: 128.75

Trading recommendation:

We have took a stop at 130.50, and we are looking for a new buying opportunity at 128.05.