Simplified wave analysis and forecast for GBP/USD and USD/JPY on May 16

GBP/USD

On the chart of the pound from May 3, the downward wave algorithm continues to develop. This price segment completes the larger wave model from March 13, which explains the pronounced impulsive nature of the movement. The price is at the lower border of the large-scale support zone.

Forecast:

The preliminary calculation of the target of the entire bearish wave indicates the reference point of the 127th price figure. After yesterday's breakthrough down at the next sessions, a counter rollback is expected, most likely in the form of a flat. The upper boundary of the flat corridor indicates the resistance zone. The breakthrough of the lower border of the support zone is more likely tomorrow.

Recommendations:

Given the nature of the price movement of the pound, you should not buy a pair today. The most reasonable tactic will be to wait out the period of the rollback, tracking the reversal signals at its end to find the point of sale of the pair.

Resistance zones:

- 1.2890 / 1.2920

Support zones:

- 1.2830 / 1.2800

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USD/JPY

On the chart of the Japanese yen, the downward wave dominating from mid-April forms a correction for a larger wave structure. The potential for reduction is almost exhausted. The wave structure is fully formed, the price is within the support zone of the senior TF. Since May 13, a potential reversal pattern has been developed on the TF H1 chart.

Forecast:

The nature of the upcoming fluctuations is likely to be flat, in a flat corridor between oncoming zones. At the next trading sessions, the price reduction that started 2 days ago is expected to end. The change, of course, can be expected by the end of the day or tomorrow.

Recommendations:

Yen sales during the trading session are possible today, but it is better to reduce the lot to the minimum. In the area of calculated support, it is recommended to track reversal signals to search for entry into long positions for this pair.

Resistance zones:

- 109.80 / 110.10

Support zones:

- 109.10 / 108.80

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Explanations to the figures: Waves in the simplified wave analysis consist of 3 parts (A – B – C). The last unfinished wave is analyzed. Zones show areas with the highest probability of reversal. The arrows indicate the wave marking according to the method used by the author, the solid background is the formed structure, the dotted ones are the expected movements.

Attention: Wave algorithm does not take into account the duration of tool movements over time.

The material has been provided by InstaForex Company - www.instaforex.com