FX.co ★ Elliott wave analysis of GBP/JPY for October 15, 2021

GBP/JPY has finally broken above the peak of wave iii/. It is heading towards the 158.69 target in wave v/ and iii of the impulsive rally that started back in mid-March 2020. It still is not completed. Once wave iii finds its peak we should be looking for a correction against the main trend, which in this case is to the downside in wave iv.

Triangles are very common in the JPY-crosses, so that will be our first option to look for. A triangle is made up from five zig-zag moves and once the triangle is complete we will expect a new impulsive rally to a new high in wave v of the impulsive rally from the March 2020 low.

For now our focus is locked on the 158.69 target, but wave v/ of iii can move higher than this target and in that case the next target to look for is seen at 160.54. So stay flexible, but also be ready for a new time-consuming sideways move to follow this final rally in wave iii.