GBP/JPY developed a bullish momentum last week… It seems that this price action was developing a bullish wave 4 correction pattern, and I think that bearish wave 5 start is around the corner.
We will review different scenarios as the pair can either bounce for bearish wave 5 or expand the bullish momentum of wave 4.
This article will discuss the wave perceptive and expected scenarios for the pair during the coming days using wave pattern, support, and resistance and SWAT software.
GBP/JPY Bounced from 50% Fibo Level
The below chart shows that the pair developed a decent bullish correction … In my view, the pair was developing a wave 4 pattern and now we are waiting for the confirmation of bearish wave 5 to start.
And here are the main conclusions:
- Wave 4 can be extended till 50% Fibo ratio and some items 61.8%.
- The pair now bounced from Fibo 50 %.
- As long as the price did not break Fibo 61.8% then this wave pattern is valid.
For the moment I expect one more lower low presenting bearish wave 5 but… Traders need to wait for the confirmations of wave 5 to take place before trading this pair… In the next paragraph, we will discuss this development by using SWAT software.
GBP/JPY Swat Chart Presents a Bull Flag
Now it’s time to use the SWAT 4-hour chart to determine the entry points according to the expected wave patterns… SWAT Chart shows bullish momentum but some developments to confirm the setup… Here are the main developments to consider:
- Need a strong bearish red candle to break the 21 EMA.
- Also, need the price to break the flag downtrend line.
- Our target is the previous bottom and -27.2% Fib level.
- I advise traders always to protect their profit or use trailing stops.
So in my view, traders should wait for the confirmation before trading this pair and look for short opportunities only as it matches the expected wave.
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