GBPJPY The rally from 221.05 may be a double zigzag pattern in a larger B wave position. Looking at the longer term chart, we still favor another leg down (below 221.05) to complete at least a 3 wave correction from 241.54 (A-B-C). That said, GBPJPY could extend to the 78.6% of 241.52-221.10 at 237.12 before the next leg down begins. The pair is testing support from a one month trendline (began at 3/14 low) but a drop below the 4/5 low at 233.53 is required to suggest that a top is in place and that wave C down is underway.
GBPCHF The GBPCHF may also be tracing out a corrective rally from the low at 2.3288. The 61.8% of 2.4757-2.3288 at 2.4196 is resistance but the short term double top at 2.4144/54 gives scope to a turn lower now. Coming under 2.3911 exposes 2.3749. A break of 2.3749 indicates that wave C down is underway (to below 2.3288).
GBPAUD We continues to look lower following the break of long term trendline support 3 weeks ago. Weakness is likely to extend in a 3rd wave to the 161.8% extension of wave 1 (2.5492-2.4664) at 2.3681. This happens to intersect with the 4/26/06 low at 2.3671. Well look for a corrective 4th wave to follow. With the 4/10 low at 2.3844, the GBPAUD is close to a short term bottom. RSI is below 30 as well. Looking at the different components of the cross (GBPUSD and AUDUSD), the AUDUSD rally appears stretched with the price consolidating near the monthly R1 level and Cables short term wave pattern looks constructive.