GBPJPY began its impressive rally from around 117.00 in 2011-2012. The pair is now trading close to 192.00. Few were expecting such a performance three years ago. Just like few are expecting a decline today. But, as we have said many times, no trend lasts forever. Let’s take a look at the weekly chart of GBPJPY and see if the Elliott Wave Principle has something to warn us about.
As visible, the whole rally from 117 to 192 could be counted as a five-wave impulse. According to the theory, there should be a correction of similar degree in the opposite direction after every impulse. That is why, instead of falling in love with the uptrend, we would rather stay aside, because a bearish reversal could be just around the corner. If this is the correct count, GBPJPY should start falling, once wave (5) is over.
