Elliott wave analysis of GBP/JPY for September 5, 2019

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The UK parliament yesterday, voted in favor for a law, saying that the UK can not leave the EU without a deal. That will likely mean a general election will be held on October 15. The outlook for no hard Brexit helped GBP, so GBP/JPY rallied strongly towards the first serious resistance at 130.70. We expect this resistance to hold the first test and a correction towards 128.19 before the next serious attempt to break clearly above 130.70 for a continuation towards 132.84.

Only a break back below 126.64 will reinstate the downtrend, but the potential downside should remain very limited.

R3: 131.80

R2: 131.54

R1: 131.17

Pivot: 130.70

S1: 130.16

S2: 129.15

S3: 128.67

Trading recommendation:

We bought GBP at 129.85 and we will take 50% profit here at 130.54 and keep our stop at 126.50 for the remaining 50%. We will re-buy GBP at 128.25 if possible.

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