GBP/JPY moved to a low of 131.20, just above our target at 131.12. This should have completed wave 2/ and we should see the start of strong rally in wave 3/ to above the peak of wave 1/ at 147.96.
Short-term we are looking for a clear break above resistance at 137.21 to confirm that wave 2/ has completed and wave 3/ is in motion.
Ideally, the low at 131.20 should be able to protect the downside, but if a minor break should be seen, we need to allow for a dip to the 131.12 target before completing wave 2/.
R3: 135.81
R2: 135.02
R1: 134.30
Pivot: 133.74
S1: 133.21
S2: 132.58
S3: 132.17
Trading recommendation:
We bought GBP at 131.20 and we will place our stop at 130.95
