GBP/JPY Elliott Wave Analysis

Elliott Wave Weekly | Written by Action Forex | Mar 27 12 10:38 GMT

GBP/JPY – 132.28 GBP/JPY – Wave 4 correction from 118.87 has ended at 163.00 Although sterling rallied again and rose to as high as 133.45 last week, the subsequent retreat suggests consolidation would be seen and another retreat to 130.00 cannot be ruled out, however, downside should be limited to 128.00 and renewed buying interest should emerge above 126.55 (previous 4th of a lesser degree), bring another upmove later. A break of said resistance at 133.45 would extend recent upmove from 116.80 for a stronger retracement of recent decline to 134.00 and possibly towards previous resistance at 135.10/15 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 is the beginning of wave 5 with minor wave i of 5 ended at 122.45 and wave ii has either ended at 140.00 and wave iii is unfolding for further weakness to 115.00 and then 113.80. On the downside, only a daily close below said support at 126.55 would defer bullishness and risk retracement of recent upmove to 125.40-50 and possibly 125.00, however, downside should be limited to 124.50 and 123.90-00 should hold and bring another rally next month. Recommendation: Buy at 127.00 for 133.00 with stop below 126.00 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 is still unfolding and will bring another test of 116 possibly in Q3, however, further steep fall below there is unlikely and 115.00 shall contain downside.