GBP/JPY Today Forecast

Daily Pivots: (S1) 138.43; (P) 139.62; (R1) 141.89;

Contrast to our expectation, GBP/JPY failed below 141.74 resistance and retreats sharply in early US session. Break of 139.57 minor support indicates that an intraday top is formed and turned outlook neutral for the moment. But after all, another rise is still in favor as long as 135.52 support holds. Break of 141.74 will confirm that recent rise from 118.81 has completed and should target 38.2% retracement of 215.87 to 118.81 at 155.88 next. However, note that firm break of 135.52 will now be an important signal that whole rise from 118.81 has completed and will turn short term outlook bearish for 127.08 support first.

In the bigger picture, whole decline from 215.87 has completed the five wave sequence already (184.47, 197.42, 129.71, 141.52, 118.81). Subsequent price actions from 118.81 should develop into consolidation/correction to the larger down trend. However, it's uncertain whether such correction will develop into sideway pattern between 118.81 and 141.52 cluster resistance (23.6% retracement of 215.87 to 118.81 at 141.71) or strong rebound to 38.2% retracement of 215.87 to 118.81 at 155.88 and above. But in any case, decisive break of 118.81 low is needed to confirm that medium term down trend has resumed. Otherwise, even in case of deep fall, GBP/JPY is just treated as developing in to medium term consolidation with at least another rise before completion.

Based on ActionForex.com Technical Outlook