GBP/JPY Set for Big Moves:Key Reversal Before a Bullish Surge
Key Terminology & Concepts:
Wyckoff Methodology (Phases A to C):
The chart indicates an accumulation phase according to Wyckoff's theory, where smart money is accumulating positions before an uptrend. Key labels include AR (Automatic Rally), SC (Selling Climax), ST (Secondary Test), and LPS (Last Point of Support), marking potential points where institutional traders take positions.
Harmonic Patterns:
A Bearish Gartley Pattern is visible, suggesting a potential retracement. This harmonic pattern is characterized by specific Fibonacci retracement levels that outline the price movement from points X, A, B, C, and D. The completion of this pattern indicates a potential reversal zone near the 0.786 retracement of the XA leg.
Elliott Wave Theory:
The chart employs Elliott Wave analysis to count the waves of price action. The corrective wave structure labeled (a), (b), (c) within a larger wave count indicates that the price is currently in a corrective phase. The third wave (iii) has peaked, and we're potentially in a wave (iv) pullback, with wave (v) to follow.
Fibonacci Extensions & Retracements:
Fibonacci retracement levels such as 0.786 and 1.236 are used to pinpoint potential support and resistance zones. The 1.236 extension (187.247) aligns with a key support area, suggesting a possible target for the upcoming correction.
Volume Profile:
The Point of Control (POC) and Volume Area Low (VAL) zones around 187.8 serve as important support and resistance levels. Price has previously reacted to these levels, indicating institutional interest.
Break of Structure (BOS):
BOS (Market Structure Break) and BOS Internal are indicated on the chart, signaling the potential areas where price breaks out of a trend, further validating the correction thesis.
Detailed Breakdown
Phase A: Wyckoff Accumulation
In this phase, the price forms the Selling Climax (SC) at 183.753, indicating a strong reversal point. The Automatic Rally (AR) occurs as a response to the SC, showing institutional buying pressure at 187.812. The ST (Secondary Test) confirms that buyers are in control as it tests the support level formed by the SC.
Phase B & C: Transition
The price moves into Phase B, which shows consolidation, characterized by smaller LPS (Last Point of Support) levels, confirming the accumulation pattern. The bullish breakout in Phase C is marked by a strong upward move, forming a new higher high at point C (195.951).
Bearish Gartley & Expected Decline
The Bearish Gartley pattern is clearly outlined between points X, A, B, C, and D. The current price is at point C, near the 0.876 retracement of the XA leg, which signals that a potential bearish reversal is imminent. This coincides with the Sell Side liquidity, indicating that the market might soon experience selling pressure.
Elliott Wave Analysis
Elliott Wave analysis suggests the price is completing a corrective wave (iv) after reaching point (iii). A final bullish impulse wave (wave v) is expected to follow. The internal structure shows that we are likely at the end of wave (b) within this larger corrective structure, with wave (c) pointing towards further declines before resuming upward momentum.
Short-Term Price Expectation (Next Two Weeks)
Bearish Pullback & Support Test
Key Support Levels:
Expect a pullback toward the 1.236 Fibonacci extension (187.247) and 0.786 retracement (186.368), which align with the bullish order block. This area represents a high-probability zone for bullish interest to return.
Bearish Target:
The correction could deepen into the Volume Area Low (VAL) at around 186.313, forming a low of the corrective wave (iv). The Support Line (SC Accumulation 1H) around 185.8 offers strong confluence for a potential reversal area.
Bullish Continuation After Pullback
Resistance & Reversal Zones:
After testing the support levels, we anticipate bullish momentum to return, forming the final wave (v) toward a new high. The first bullish target could be the Sell Side Liquidity at 193.5, with the Current Weak High of Range marked at 195.5 as a potential upside target.
Conclusion
In the next two weeks, the market is likely to experience a corrective pullback within a larger uptrend. The 1.236 and 0.786 Fibonacci retracements provide key support areas where buyers are expected to step in. After this correction, the final wave of the uptrend (wave v) should resume, targeting new highs near 195.951. Use these critical support and resistance levels to manage positions and monitor any break of structure to validate directional bias.
Key Action Points:
Watch for bearish retracement towards 187.247–186.368.
Enter long positions near key Fibonacci and Volume Profile support.
Target new highs at 193.5–195.5 after the corrective wave completes.
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