close icon

GBPJPY Bears Aiming at 120, Before Giving Up

Whether it is because of Brexit or not, GBPJPY has been trading below 160.00 ever since the referendum in June 2016. The pair has been locked in a wide range between 156 and 124 for four years now. Last week, it closed the session at 134.66, down from 138.84 at the open.

In order to put things in Elliott Wave perspective, we need to examine GBPJPY ‘s behavior since the top at 195.89 in June 2015. The daily chart below allows us to do that.

GBPJPY forming an ending diagonal pattern

The first thing to notice is that the decline to 124.69 by October 2016 is a five-wave impulse. The pattern, marked as wave (A), is labeled 1-2-3-4-5, where the five sub-waves of the third wave are visible, as well. It was followed by a simple A-B-C zigzag in wave (B), where wave C was an ending diagonal.

GBPJPY Helps the Market Reveal its Fractal Nature

This means the choppy and overlapping decline which has been in progress since the end of wave (B) at 156.61 must be wave (C). It is hard to imagine how wave (C) is going to evolve into an impulse from here. It makes a lot more sense to expect an ending diagonal to emerge.

With that in mind, it appears wave 5 of (C) has just begun. It should be able to breach the low of wave 3, which means targets in the 120.00-122.00 area are plausible. Once there, however, the entire (A)-(B)-(C) since the top in June 2015 would be complete. A swift and sharp bullish reversal should then be anticipated in GBPJPY.

The formation of an ending diagonal in wave (C) would reveal in a beautiful way the fractal nature of the markets. It would mean the entire (A)-(B)-(C) structure is the same as the A-B-C zigzag in wave (B), only bigger and inverted. Let’s see…

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out late Sunday!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

USDTRY Heads South After Central Bank Decision

Turkey finally took a decisive step towards taming the double-digit inflation, which has been destroying the Lira’s value for years. The country’s central bank lifted the benchmark interest rate to 15%, up 475 basis points from its previous standing. USDTRY fell as low as 7.5031 earlier today, on track for a second consecutive week of…

Read More »

GBPNZD Can Slide to Sub-1.9000 In Coming Weeks

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out on Sunday! GBPNZD exceeded 2.0270 in mid-August, but the bulls could not keep the positive momentum. A month later, the pair fell to 1.9055, losing 6% in the process. And just when it…

Read More »

Ahead of EURUSD ‘s 280-pip Drop in September

EURUSD had been on a tear since mid-March when it bottomed out at 1.0636. Nearly six months later, on the first day of September, the pair exceeded the 1.2000 mark. The bulls seemed firmly in control and the Fed’s money printing suggested further losses ahead for the dollar. However, years of experience had taught us…

Read More »

Ahead of GBPUSD in Both Directions. Now What?

GBPUSD had a good run over the past six months, climbing from its 1.1412 March low to as high as 1.3483 last week. The pair is now back below 1.3000 after the latest portion of Brexit-related mess. Later in this article we will share our view of where the Pound is headed against the dollar,…

Read More »

USDTRY Set to Complete 12-Year Impulse Pattern

The U.S. dollar has been steadily climbing against the Turkish lira since 2008. Ten years later, in 2018, USDTRY reached 7.1500 on the back of geopolitical tensions and President Erdogan‘s reckless political decisions. In May 2019, however, the pair was down to 6.0600 and it looked like the Lira’s plunge might be finally over. Unfortunately,…

Read More »

EURUSD Up 420 Pips in a Month as Uptrend Resumes

The inevitable seems to be happening to the U.S. dollar. After record-breaking liquidity injections by the Fed in response to the COVID-19 crisis, the greenback is weakening across the board. The U.S. dollar has recently been declining against its major rivals, including the Yen, the pound and the euro. EURUSD, the most traded Forex pair…

Read More »

More analyses