GBPJPY
GBPCHF
GBPAUD
Commentary – We wrote two weeks ago that “the rally from 219.30 is nearing an end as the pair approaches reversal points of 238.95 (61.8% of 251.10-219.30) and the 78.6% at 244.29. 238.95-244.29 is also a former congestion zone (circled). Confidence is high that this rally from 228.19 will prove terminal because the rally is from a triangle and triangles lead to terminal movements. Look for a top and reversal in the ‘reversal zone’.” That top may be in place at 240.67. The decline from 240.67-235.90 is in 5 waves and suggests that another 5 wave decline will follow. Short term bearish targets are 234.04 and 231.09 (100% and 161.8% extensions of 240.67-235.90/238.81.
Strategy – Bearish, against 240.67, targets 234.20 and 231.20.
Commentary – We have continued to state that the “the longer term trend is down as long as price is below the former peak, which is at 2.4427.” We can move risk to 2.4205 now. Lower highs and lower lows on the daily chart do favor a bearish bias. From an EW perspective, the decline from 2.4963 and subsequent rally to 2.4426 are either waves 1 and 2 or waves a and b. Wave c may have completed a correction at 2.3487, in which case the decline is complete. However, the advance from 2.3487-2.4205 does not look clearly impulsive therefore we lean towards labeling that advance wave ii within a bear cycle from 2.4426.
Strategy – Remain bearish, move risk to 2.4205 (from 2.4426), bearish objective is 2.2477
Commentary – The rally from 2.2425 is most likely the 4th wave correction within the 5 wave decline from 2.5638. Potential resistance is at the 10/3 high at 2.3165 and the 38.2% of 2.5638-2.2425 at 2.3352. A rally to one of these levels should give way to a top and reversal. A new low is then expected to register below 2.2425 in wave 5 before a larger recovery.
Strategy – Flat