GBP/JPY Consolidates with Upside to 146; Elliott Wave Count
Short to Medium Term
– The GBP/JPY continues to show strength, but is consolidating today after the BoE held the benchmark interest rate at 0.5%. Looking at the 1H chart, we see the market consolidation in a possible triangle. If not, it is likely a flat, with support near 138 and resistance near 140. We have a 38.2% retracement support right below 138, but i that is broken, we might slide towards 136.
– For the wave count to be valid, the market should not break below 136.
– IF the market rallies from 138 and breaks above 140, we are completing an impulse wave, and equality of wave (v) to wave (i) projects this terminal wave towards 141.70. Then we might get a stronger correction.
– However, the count suggests we are still in the most dynamic part of a rally.
– Looking at the daily chart, we see that if this is indeed wave III, we can see a fibonacci expansion (of wave I)of 161.8% towards the 146 pivot, April 2010 high. Only a break below 136 suggests further sideways action. Only a break below 133.00 threatens bearish outlook. Right now, there is clarity in price action, structure and momentum to the bullish scenario, with upside to 146 in Q2.
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