FX.co ★ GBP/JPY Wave Analysis for December 11, 2012

GBP/JPY Elliott Wave

Since our last analysis the GBP/JPY pair was trading in an upward move, impulsive 5 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. Yesterday, during the Asian session we could observe descending movement toward the 131.66 level. Therefore, during the European and New York sessions the GBP/JPY pair did not manage to hold this level and the price retraced back till 132.50 level. At the moment this exotic currency is trading around 132.42 level and we are expecting to see the price higher today. In accordance with our wave rules and taking into account that the wave 5 should retrace 100% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 136.48 (100% of wave 1). To reduce the risk, we can use invalidation at 131.56 level as stop loss.

Support and Resistance

(S3) 131.36 (S2) 131.67 (S1) 131.86 (PP) 132.17 (R1) 132.48 (R2) 132.67 (R3) 132.98

Trading Forecast

Proceeding from Elliott Wave rules today, the price is expected to begin the upward movement. That is why Long positions at level 132.60 with stop loss 131.56 and take profit at 136.46 are recommended.