GBP/JPY Around 123.50 Today - Analysis for July 5, 2012

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GBP/JPY Elliott Wave
Yesterday the GBP/JPY pair was trading in a downward move developing impulsive wave 3 (coloured blue). During the early European session we could observe a descending movement towards the 124.65 level. Therefore, during the New York session we could observe continuation of the bearish mood with the price reaching new daily low at 124.18 level. Today this exotic pair is trading around 124.00 level and I am expecting to see the price around 123.50. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci Extensions (125.42-124.24-125.39) with Take Profit 1 at 123.54 (161.8% of wave 1) and Take Profit 2 at 123.08(200% of wave 1). Resistance point at 124.20 can be used as a Stop Loss point.
Support and Resistance Levels
(S3) 123.64 (S2) 124.04 (S1) 124.28 (PP) 124.68 (R1) 125.08 (R2) 125.32 (R3) 125.72
Trading Forecast
Proceeding from Elliott Wave Rules this week, the trend is expected to begin the downward movement. That is why short positions at level 124.00 with Stop Loss at 124.20, Take Profit 1 at 123.54 and Take Profit 2 at 123.08 are recommended.