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GBP/JPY Elliott Wave
Since our last analysis the GBP/JPY pair was trading in an upward move, like we expected, impulsive 5 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. During the Friday's European session we could observe descending movement toward the 131.67 level and we can consider this move as the end of the corrective 4 wave (coloured blue). Therefore, during the New York session this exotic currency did not manage to hold this level and the price started pushing higher reaching a new daily high at 132.58 level. We can consider this move as the end of the 1 wave (coloured pink) of the bigger 5 wave (coloured blue). At the moment the GBP/JPY pair is at the end of the 2 wave and we are expecting to see the price higher today when development of the 3 impulsive wave starts. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 133.87 (161.8% of wave 1). To reduce the risk, we can use invalidation at 131.56 level as stop loss.
Support and Resistance
(S3) 130.83 (S2) 131.25 (S1) 131.75 (PP) 132.17 (R1) 132.67 (R2) 133.09 (R3) 133.59
Trading Forecast
Proceeding from Elliott Wave rules today, the price is expected to begin the upward movement. That is why long positions at level 132.10 with stop loss 131.56 and take profit at 133.87 are recommended.
