GBP/JPY Elliott Wave
For the last 5 days the GBP/JPY pair was trading in a downward move developing corrective wave (2) (coloured green). Yesterday during the European and New York sessions we could observe a strong descending movement towards the 121.10 level (5 days low).Today during the early Asian session this exotic currency break below yesterday’s low and price reached 121.03 level. We can consider this move as the end of the (2) wave (coloured green) and we are expecting to see the price higher for the next few days. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (120.81-123.70-121.03) with Take Profit 1 at 124.10 (100% of wave 1) and Take Profit 2 at 125.92 (161.8% of wave 1). To reduce the risk we can use Invalidation point at 120.81 as Stop Loss. Also it is necessary to monitor the UK Services PMI and EU Retail Sales m/mI data that can change the rate of the pair.
Support and Resistance
(S3) 120.22 (S2) 120.78 (S1) 121.13 (PP) 121.69 (R1) 122.25 (R2) 122.60 (R3) 123.16
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 121.70 with Stop Loss 120.81, Take Profit 1 124.10 and Take Profit 2 at 125.92 are recommended.