GBP/JPY – 143.55
GBP/JPY – Wave 5 as well as wave (III) has possibly ended at 116.85
Although sterling’s retreat from 148.10 turned out to be stronger than expected which signals a temporary top has been formed there, as the British pound found support at 141.50 earlier this week and has rebounded, suggesting consolidation above this level would be seen and recovery to 144.00-10 and possibly 144.90-00 cannot be ruled out, however, key resistance at 145.45 would remain intact, bring further consolidation. Only a daily close above this level would suggest the fall from 148.10 has ended, bring further gain to 146.00, then towards 147.00-10 but a sustained breach above latter level is needed to retain bullishness and signal correction from 148.10 has ended, bring retest of this level first.
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, expect pullback to be limited to 142.50-55 and bring another rebound. Below 142.00 would bring another test of said support at 141.50 but only break there would signal the fall from 148.10 top is still in progress, bring a stronger retracement of recent rise to 141.00 and possibly towards previous resistance at 140.35, however, reckon downside would be limited to psychological level at 140.00, bring rebound later.
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.
