The current GBPJPY structure shows an intermediate corrective wave (B) that consists of minor sub-waves A-B-C.
Following (B), the market started moving in wave (C), which is likely to end the correction in the minor degree at fresh highs.
The minor 5-wave impulse pattern in wave 1 is now nearing an end. The end of the minute degree wave substructure could be completed near 135, as this makes a good round resistance and fits the pattern as a last 5th wave too.
After the completion of wave 1, we could see a decline in the correction wave 2 near the 129.40 area. At that level, the correction wave will be at 50% of wave 1.
Since we haven’t seen a proper elongated correction in any of the fourth waves, however, we consider an alternative scenario very likely too.
The end of the intermediate corrective wave (B) is not completed in this alternative scenario, respecting the rule of alternation.
Should this structure prevail, we can expect a decline in the final leg of minor wave C.
This would indicate that we are corrective in minute wave four.
Subsequently, the completion of the bullish correction could again take place near the 135 area. However, bears will likely continue to push the prices down and break below the 123.87 low.
The fresh low, and consequently wave C, could end anywhere below the swing low, should this scenario come into play.
