GBP/JPY up to 155?

WEEKLY:

1) First, late February we broke the falling TL confirming a new weekly wave @133.85 (then retested that level with failure). A supporting TL is now active, looking for a corresponding res. TL to form a channel.

2) The KEY support @140.63 on W1 turned into resistance in March, but now seems under serious attack. A weekly close above should trigger a bullish fiesta targeting the upper side of a new W1 correction channel, levels 155 – 156.

DAILY:

3) The TL on the recent highs on D1 broke on March 23 @139.30 (that rally reached as high as 145 the next day). I find it interesting how 2 days ago the corrective move down bottomed @135.69 (key weekly TL support there) & then managed to close the day @139, maintaining the previous res. TL as current support TL.

4) The current wave on D1 looks like a strong W3 impulsive up, with W2 currently active on a smaller level (see below on H4 the count). This means that we might be witnessing the calm before the storm right now

H4

5) H4 offers long opportunities as the key D1 & W1 levels are tested – 140.60 & 139.70. The first level also corresponds to a re-test of the wave TL on H4, the one that broke yesterday without significant price action above yet. Looking forward for a fresh high to reconfirm that bullishness. The current situation looks like offering great swing entries, but very short term is mixed (longs now are still aggressive).

6) Observation: the drop from 142.62 earlier today was extremely sharp (200 pips on a 5min. candle). Regardless of any fundamental influence on that drop, I see that as a clear sign the real battle is going to be held in that area. If GJ is set to retrace much more, that another failure @142 will confirm it. Otherwise, if the bulls find their way through 143, I think our April’s Fool Joke might come true by the end of this month.

Good luck!

Mihai Marinescu
FX Instructor