Dear traders,
the GBP/JPY made a deep decline recently. But the rebound up is equally impressive.Β
The volatile price action makes it difficult to read the charts properly. But we could see this improve if a clear bearish ABC pattern soon appears.
The GBP/JPY 1 hour chart seems to have completed a bearish ABC (pink) at the recent low. The current bullish price action is also unfolding in 5 waves. What does this mean?
It indicates that more upside is expected (green arrows) after price action completes an ABC (pink) down (orange arrows). The bearish retracement is expected after a bullish 5 wave pattern.
Once the ABC is finished, the bulls could retake control and push price action higher again within the larger uptrend (see moving averages).
Only a break below the previous bottom could indicate a pause of the uptrend (yellow and red circles).
On the 15 minute chart, we can see the fluent bearish price action down (red candles) and up (blue candles).Β
The 5 wave down, however, seems to complete a larger wave C (pink) whereas the 5 wave up is probably part of a wave A (purple).Β
The ABC pattern remains valid as long as price action respects the support zones (blue boxes). The uptrend targets are located at:
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.
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