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Elliott Wave Weekly

GBP/JPY Elliott Wave Analysis

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GBP/JPY – 144.85





 

GBP/JPY – Wave 5 as well as wave (III) has possibly ended at 116.85





 

As sterling has eased after rallying to 148.10 last week, suggesting consolidation below this level would be seen and pullback to 145.50-60 cannot be ruled out, however, reckon 144.65-75 would limit downside and bring another rise later, above said resistance at 148.10 would bring test of previous chart resistance at 148.55, however, break of this A leg top is needed to confirm early upmove from 120.50 low has resumed and extend gain to 149.00-10, then towards psychological resistance at 150.00 which is likely to hold on first testing. 


 


Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


 


On the downside, whilst initial pullback to 145.50-60 is likely, reckon downside would be limited to 144.65-75 and bring another upmove later. Below 143.80 would defer and risk correction to 143.00 but downside should be limited to 142.30-35 and price should stay above previous resistance at 142.10-15, bring another rise later. Only a daily close below 142.10-15 would abort and signal top is formed instead, bring correction to 141.50, then 141.00 but price should stay above another previous resistance at 140.35 and bring another rise later. 



Recommendation: Buy sterling at 144.70 for 147.70 with stop below 143.70.




The long-term downtrend from 570.99 (29 Feb 1980) is labeled as an impulsive wave with III with circle ended at 129.77 (20 Apr 1995) and the corrective rebound to 251.12 (20 Jul 2007) is treated as wave IV with circle and the wave V with circle selloff from 251.12 has possibly ended at 116.80 (almost reached our indicated target at 116.00) and major correction has commenced from there and indicated upside target at 183.90-00 (50% Fibonacci retracement of 251.10-116.85) had been met, reckon upside would be limited to 199.80-90 (61.8% Fibonacci retracement) and bring wave (V) decline in later part of 2017.

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Author: Action Forex
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