Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The GBP/JPY is finally accelerating. Looking at the Daily, we see that a swing projection targets 136.40, and has the 137.75 resistance in sight.
- The RSI in the 4H chart shows a bullish momentum breakout, and the daily chart is about to do the same.
- This suggests that we are now in a wave 3 of C, and 134.30 should hold as support for a rally towards these targets. This would make the rising wedge we broke out of a leading triangle, usually something found at the beginning of waves, but here is in a C wave, so it is a bit unusual. Note we had the same situation in the EUR/USD, where a ending diagonal ending triangle, ended up to be the middle of a 5 wave sequence.
- The bearish for the GBP/JPY is now put aside unless a break below 132.50 occurs. Otherwise, we should anticipate the rally to extend to 136.40 and possibly 137.75. If the market is declining from beyond 136.40, I would think of 132.50 as a strong support. If it fails to reach 136.40 before declining, there is more chances it will break and the count was indeed an ABC corrective rally within a large consolidation pattern yet to be resolved.
- However, if on the way down the GBP/JPY market respects 132.50, and rallies again, we could be starting a bullish attempt to break out of the consolidation GBP/JPY has been in since 2010.
Has the GBP/JPY turned bullish in the intermediate term? We would love to hear what you think.
Fan Yang CMT
Chief Technical Strategist