GBPJPY Weekly Analysis: Wave IV Pullback Sets the Stage for Wave V Rally Toward New High

Introduction 

GBP/JPY continues to maintain its long-term bullish trend after completing the strong impulsive advance into Wave III. Recent price action indicates that the pair has entered a corrective ABC pullback, which is expected to form Wave IV before the next bullish impulse begins. 

The Elliott Wave structure, Fibonacci support zone, and Awesome Oscillator momentum suggest that the current correction could provide an opportunity for buyers before the market resumes its primary uptrend. 

Wave IV Correction Currently Developing 

Following the completion of Wave III, GBP/JPY has started an ABC corrective structure. 

Wave (A) has already declined from the recent high, while the current recovery is identified as Wave (B). Once Wave (B) is completed, the market is expected to decline into Wave (C), completing the larger Wave IV correction near the highlighted Fibonacci support zone. 

This support area is expected to attract fresh buying interest before the next impulsive rally. 

Wave V Expected to Create a New High 

Upon completion of Wave IV, GBP/JPY is expected to begin Wave V, extending the long-term bullish trend. 

The projected bullish scenario targets: 

• Completion of the ABC corrective structure.  

• Strong rebound from the Fibonacci support zone.  

• Continuation of the primary Elliott Wave uptrend.  

• A new higher high above the previous Wave III peak.  

As long as the support zone remains intact, the broader bullish outlook continues to dominate. 

Awesome Oscillator Shows Weakening Bullish Momentum 

The Awesome Oscillator is displaying a bearish divergence, indicating that bullish momentum weakened as price reached a new high. 

The histogram also suggests that the market is currently in a pullback phase, supporting the expectation of a Wave IV correction before bullish momentum returns. 

Traders should monitor for bullish momentum recovery near the projected support zone. 

Trading Outlook 

The preferred scenario is for GBP/JPY to complete Wave IV near the highlighted Fibonacci support area before resuming its long-term uptrend. 

Traders should monitor: 

• Completion of the ABC corrective pattern.  

• Bullish reversal candlestick formations such as Bullish Engulfing, Hammer, or Morning Star.  

• Momentum recovery on the Awesome Oscillator.  

A sustained break below the projected support zone would weaken the current bullish wave count and increase the possibility of a deeper correction. 

Conclusion 

GBP/JPY remains bullish in the longer-term despite the ongoing correction. The current ABC pullback is viewed as Wave IV, while the broader Elliott Wave structure continues to favour another bullish impulse toward a new all-time high in Wave V. As long as the Fibonacci support zone holds, the probability remains high that buyers will regain control after the correction is completed.