While the bigger picture is now losing its bullishness (but technically still in an ascending formation), shorter-term we saw the development of an impulsive bearish wave yesterday on GBPJPY. The pic on M30 chart looks like a retracement is due, as we currently have all the necessary ingredients:
- A clear 1-2-3-4-5 formation (162.37 – 159.46) on M30 – H1 now looking complete (divergences on RoC & stoch right at the lows of W3 & W5.
- M30 TL broke @160.00 & now we are trading above this TL (159.98 at this time)
- first wave of the correction may be complete already (159.46 – 160.26), which makes the current push down a possible wave B of the ABC wave targeting approx. 50% fib of yesterday’s drop (also previous support)
- According to the waves 159.80-159.90 offers good long opportunities with tight stops @159.40. Once this level is taken out the pattern is invalidated.