GBP/JPY – 146.05
GBP/JPY – Wave 5 as well as wave (III) has possibly ended at 116.85
As stealing met resistance at 146.55 and has retreated, retaining our bearishness (we recommended to sell sterling at 146.50 and a short position was entered) and as long as said resistance holds, mild downside bias remains for another retreat to 144.85, then towards support at 144.05, however, break of latter level is needed to add credence to our view that top has been formed at 147.75 last month, bring further fall to 143.25-30, break there would signal the rebound from 138.70 has ended and bring at least a retracement of this rise to 142.50 (previous resistance), then 142.00 but price should stay well above 140.00, bring rebound later.
Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.
On the upside, above said resistance at 146.55 would abort and suggest the retreat from 147.75 has ended instead, bring a stronger rebound to 147.00. Only break of said resistance at 147.75 would revive bullishness and bring test of previous chart resistance at 148.10, break there would signal early rise from 135.60 (this year’s low) has resumed for gain to 148.45 (another previous resistance) and later 149.00-10 but price should falter below psychological level at 150.00, bring retreat late.
Recommendation: Hold short entered at 146.50 for 144.50 with stop above 146.60.
The long-term downtrend from 570.99 (29 Feb 1980) is labeled as an impulsive wave with III with circle ended at 129.77 (20 Apr 1995) and the corrective rebound to 251.12 (20 Jul 2007) is treated as wave IV with circle and the wave V with circle selloff from 251.12 has possibly ended at 116.80 (almost reached our indicated target at 116.00) and major correction has commenced from there and indicated upside target at 183.90-00 (50% Fibonacci retracement of 251.10-116.85) had been met, reckon upside would be limited to 199.80-90 (61.8% Fibonacci retracement) and bring wave (V) decline in later part of 2017.