GBP/JPY collapsed in overnight trading and tested 131.43 as the low. This was just below the equality target between wave C/ and A/, which was seen at 132.78. This indicates wave B likely has completed and a new impulsive rally is developing to above 156.61.
Short-term, we do expect a minor set-back to 132.78 before the next rally higher towards 139.91 and above to confirm that a long-term low has been seen and a new impulsive rally is developing.
R3: 135.31
R2: 134.65
R1: 134.25
Pivot: 133.86
S1: 133.64
S2: 132.78
S3: 132.35
Trading recommendation:
We will buy GBP upon a break above 134.62
