GBP/JPY Elliott Wave

For the last few days the GBP/JPY pair was trading in an upward move, impulsive 3 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. Yesterday during the Asian and European sessions we could observe sideways move between 131.53 and 131.23 level. Therefore, during the New York session the GBP/JPY pair started pushing higher and the price reached a new daily high at 131.71 level. At the moment the price is trading around 132.50 level and we are expecting to see the price lower when development of the corrective 4 wave (coloured blue) starts. 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 130.70 (38.2% of wave 3). To reduce the risk, we can use resistance at 132.80 level as stop loss.

Support and Resistance

(S3) 130.99 (S2) 131.22 (S1) 131.37 (PP) 131.60 (R1) 131.83 (R2) 131.98 (R3) 132.21

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 131.30 with stop loss 131.80 and take profit at 130.70 are recommended.