Short Term Elliott Wave view on GBPJPY suggests that further downside is expected. On the chart below, wave ((iii)) ended at 143.74 and wave ((iv)) bounce ended at 146.51. Pair has since broken to new low below 143.74, validating the downside bias. Internal of wave ((iv)) unfolded as a zigzag Elliott Wave structure where wave (a) ended at 145.87, wave (b) ended at 144.78, and wave (c) ended at 146.5.
Wave ((v)) is currently in progress as an Elliott Wave impulse structure. Down from 146.5, wave (i) ended at 144.96, wave (ii) ended at 145.37, and wave (iii) ended at 143.62. Internal of wave (i) and (iii) also subdivided as an Elliott Wave impulse in lesser degree. Expect wave (iv) bounce to fail in 3, 7, or 11 swing for further downside. We don’t like buying the pair. Potential target for wave (iv) is 23.6 – 38.2 Fibonacci retracement of wave (iii) which comes at 144.28 – 144.48 area. Ideally the rally does not extend to more than 50% of wave (iii) at 144.48 as that can increase the risk that the cycle from May 3 high has ended. As far as wave (ii) pivot at 145.37, and more importantly pivot at 146.5 stays intact, the right side remains lower.
GBPJPY 1 Hour Elliott Wave Chart
