GBP/JPY did not react much to the ECB decisions to cutting the rates and launch a new bond buying program. After a minor dip to just 132.14 it continued higher to re-test the 133.40 high. We doubt very much that red wave ii completed with the 132.14 test and continues to look for a lager dip closer to at least 130.81 and likely even closer to 129.41 before the next impulsive rally is expected.

A break below minor support at 132.84 will be the first indication that red wave ii still is in motion, while a break below 132.41 will confirm this outlook. That said, we can not dismiss the possibility, that red wave ii could be complete already and red wave iii towards 135.40 already is developing.

R3: 134.68

R2: 134.00

R1: 133.55 '

Pivot: 133.18

S1: 132.84

S2: 132.40

S3: 132.00

Trading recommendation:

We are looking for a 50% buying opportunity near 131.20 and 50% near 129.50.