GBP/JPY dipped to a low of 133.94. With this dip, the level 134.50 has been completed. So, we will be looking for signs that the pair is searching for a bottom. The first strong indication of a a corrective decline in wave 2 being complete will be a break above resistance at 135.26 while a break above resistance at 136.28 will confirm a new impulsive rally in wave 3 is unfolding.

However, as long as resistance at 135.26 is able to cap the upside, we must accept a final dip to just below the 133.94 low. However, the downside potential should be limited.

R3: 136.28

R2: 134.92

R1: 134.48

Pivot: 134.29

S1: 133.94

S2: 133.68

S3: 133.40

Trading recommendation:

We bought GBP at 134.75