GBPJPY had reversed from 143.00 resistance early this month and has given up over 750 pips as bears hit 135.50 lows. The current levels might provide some support as it is close to fibonacci 0.618 retracement of recent upswing between 131.00 through 143.00 levels respectively.
GBPJPY probable wave counts are as follows: The currency has dropped through 124.00 levels in March 2020 and since then has been in control of bulls. It has carved higher highs and higher lows through 143.00 until recently. The wave structure looks to be either corrective A-B-C or Wave 3 might be in progress.
If an A-B-C correction is complete, GBPJPY should be heading lower below 124.00 levels in the next few weeks. Also note that the currency has reversed from fibonacci 0.786 retracement of the previous drop between 148.00 and 124.00 levels respectively.
Alternately, if a Wave 3 is under way, GBPJPY should stay above 131.00/132.00 support and continue printing higher highs towards 148.00 over the next few days. Immediate resistance is seen through 138.00 levels, while support is around 132.00. A break above 138.00 would be constructive for bulls.
GBPJPY has been drifting sideways for a while after hitting lows around 135.50 and might print yet another low towards 134.00 mark before reversing. Either way, it is suggested to remain cautious around current levels to initiate fresh shorts.
Traders might be preparing to take profits on short positions initiated earlier from 143.00 levels. They might want to turn bullish again around the 134.00/50 zone.
Technical Analysis Team
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