GBP/JPY Reversal Potential at 244.00/246.50


[B]Commentary -[/B] We wrote last week that “this could be the beginning of the larger turn that we have been looking for as the pair has broken below the last 4 weeks? lows as well as the support line drawn off of the March and June lows.” After watching the form of the decline from 241.10, we are confident that this is the beginning of a larger decline that should last weeks, if not months. Near term, it is likely that an expanded flat is unfolding from 238.29. Near term, price is likely to exceed 242.91 and test 244.35. The next level of resistance (after 244.35) is 262.21. We will look for a top and reversal at the 244.00/246.50 zone.
[B]Strategy -[/B] Longer term - remain bearish against 251.10. Short term - bullish potential ends at 244.00/246.50, keep risk to 239.87

[B]Commentary -[/B] The GBPCHF form is the exact same as the GBPJPY. The rally from 2.4204 is wave c within a flat correction that began at 2.4300. Expectations are for the advance to continue towards 2.4631/2.4710, the 50%-61.8% of 2.4963-2.4300. This is also a former congestion area. Look for a top and reversal in this zone. (see last week?s report for the weekly chart and accompanying analysis)
[B]Strategy -[/B] Longer term, remain bearish against 2.4963, target below 2.3288. Shorter term, bullish potential ends at 2.4632/2.4710, look for a top and reversal in that zone

[B]Commentary -[/B] We wrote last week that “choppy declines usually give way to sharp reversals higher. In this case, a sharp rally would most likely be wave c in a flat correction that began at 2.3287. We would expect it to end close to 2.3911.” The GBPAUD rallied to 2.3946 yesterday. We see potential for a rally to 2.4287 to complete wave c of an expanded flat. The alternate count has the pair falling from close to current levels (and is shown in with the red arrow).
[B]Strategy -[/B] Flat