GBP/JPY – 143.80
The British pound found good support at 141.20 and has rallied from there since, dampening our bearishness and suggesting the fall from 147.75 has ended at 139.35 instead, hence upside bias is seen for this move to extend further gain to 146.00 and later towards resistance at 146.80, however, break of latter level is needed to signal the correction from 147.75 has ended and bring further subsequent rise to 147.30-40, then retest of this recent high 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 pullback to 145.00 cannot be ruled out, reckon 144.50-60 would limit downside and bring another rise later. Below 144.00 would defer and risk weakness to 143.00 but only break of previous resistance at 143.00 (tentatively wave i top) would defer and risk weakness to 142.45-50, having said that, still reckon downside would be limited to 142.00 and support at 141.20 should remain intact, bring another rebound later.
Recommendation: Buy at 144.70 for 146.70 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.
