Elliott Wave Weekly

GBP/JPY Elliott Wave Analysis

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GBP/JPY – 142.70





 

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





 

Despite retreating to 139.85 last week, sterling found renewed buying interest there and has rebounded again, suggesting near term upside risk remains for the corrective rise from 138.70 low to bring retracement of recent decline from 148.10 top, hence gain to 143.50 and possibly towards resistance at 143.95 cannot be rule out, however, reckon upside would to be limited to 144.90-00 and resistance at 145.40 should remain intact, bring another decline later.

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 pullback to 142.00 is likely, reckon downside would be limited to 141.45-50 and support at 140.50 should hold, bring another rebound later. Only a drop below indicated support at 139.85 would revive bearishness and signal the rebound from 138.70 has ended, then further fall to 139.00-10 would follow but said support at 138.70 should hold on first testing. Looking ahead, only break of 138.70 would extend the fall from 148.10 top to 137.50-60, then 136.95-00, however, prevent sharp fall below 136.00-10 should not be repeated and price should stay well above support at 135.60.





Recommendation: Stand aside for this week.





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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