FX.co ★ Elliott wave analysis of GBP/JPY for October 9, 2020

We continue to look for a clear break above resistance at 137.42 to gain upside momentum towards 138.67 and ultimately a break above the former peak at 142.72.

That said, we need to look closely at, what happens near resistance at 138.28 as the possibility of a leading diagonal always is a possibility when we see a series of waves one and two in the beginning of a new impulsive trend.

If a leading diagonal is a correct formation here, we will see resistance at 138.28 that may cap the upside for a dip to at least 136.00 and possibly even closer to 135.06 before the next push higher again.

R3: 138.09

R2: 137.78

R1: 137.40

Pivot: 137.13

S1: 136.88

S2: 136.78

S3: 136.45

Trading recommendation:

We are long GBP from 135.27 and we will raise our stop to 135.70.