The Sterling Yen daily chart formed a Wolfe Wave with currently the 4 wave points being in place. We see a bullish wolfe wave with current price action looking to drop to create Wave 5 and possibly enter the sweet zone.
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| Watching GBPJPY - Bullish Wolfe Wave |
Shorting this pair would be a risky yet rewarding opportunity, with the ideal stop levels being at 156.768 with target levels at 150.453 and 147.726 respectively.
The bullish Wolfe wave shows a projection of 164.570 to be formed by the year end. Thus traders should pay attention to price action once the GBPJPY pair runs into the regions of 150 - 147/145.
The short trade which is basically a counter trend trade can also be validated by using median lines as shown in the chart below. In this case we have the potential target level at 149.641 from where we can expect a bounce and ideally drop to 146.1 before which we can expect to see the bullish price action.
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| GBPJPY - Short Sell Price Objectives |
Hi - I think the way you plot a bullish wave is incorrect on the chart above.
ReplyDeleteHello The Wolfe. The above Wolfe (and the previous ones, EURUSD, USDJPY) are done beforehand (i.e: When 1, 2, 3 and 4 wave points are established). Ideally a Wolfe wave is valid only after wave point 5 is formed. The above pattern is made to keep an eye out in anticipation for wave 4 to be formed. So there is a 50-50 chance that the Wolfe wave becomes valid (by establishing a valid 4th point) or there is a failure.
DeleteFor GBPJPY, price has overshot the level 4. However, I would still consider it to be valid so long at 156.768 (point 1) is not reached.
We'll have to wait and watch how this turns out.