GBP/JPY: Stalking Correction Rally

Weekly: The weekly shows the bearish momentum and the next target if the current, 78.6% retracement level at 1.29 does not hold.

4H and 1H: The 4H timeframe shows the support at the 127.50/128.00 area holding up. During yesterday's Forex Video Technical Update, I mentioned that the correction within a 'triangle' or rather a flag may be over according to wave counts. The market declined, but I also mentioned that it should be strong.

Instead the decline was persistent BUT weak. The rally that bouned off of 127.50 area is becoming stronger.

This suggests further correction if not a reversal, where yesterday's breakout was wave X connecting two corrective structures.

There's no way of me predicting the form of the next wave, but a measured projection will help anticipate where it may top off. So if the current rally goes to 132.50 in a zig zag manner, I would be anticipating a decline.

Also, this rally would be meeting all sorts of resistance. It will be meeting the 4H SMA50, which is the 1H SMA200. This will also test a declining trendline. Also, the area just above 1.31 saw consolidation, so resistance also resides here.

Of course, the market does not have to rally to 132.50 but the idea to continue stalking for a resolution of the correction with this target as a guide.