GBPJPY Analysis: The Market Prepares for a Correction as the Final Wave Ends
GBPJPY prepares for a correction as the final wave ends. The Motive wave began at the 172.130 price level, from the supply zone. Since then, the market's order flow has been bearish. However, GBPJPY seems to be in a tug of war as buyers are finding opportunities to buy at the 155.350 demand zone.
GBPJPY Significant Zones
Demand Zones: 155.350, 148.630
Supply Zones: 172.130, 162.330
GBPJPY made a rapid rally out of an extremely discount zone by making a zig-zag correction wave. The correction wave began at the 148.630 price level to aid in the price's rapid upward movement. At the end of the zig-zag correction wave, a new impulse wave began after the rejection in the 172.130 supply zone. However, before the correction wave, GBPJPY was fluctuating within the 169.00 and 159.00 price levels. This fluctuation lasted between January 1, 2022, and September 24, 2022.
According to the Moving Average Convergence Divergence, the market is clearly in a downward trend. From the first impulse leg, the market's environment changed to a bearish one. In the second wave, GBPJPY retraced into a bearish order block characterized by the last bullish candlesticks to hit the 172.130 price level. The third wave remains the longest impulse leg, which might also be the longest motive wave once the fifth wave ends. Due to the drastic decrease in momentum, the fifth wave might not extend far beyond the end of the third wave, which is marked by the 155.350 price level.
The refined bearish order block has already been filled on the four-hour chart, and the price now heads down as the final wave prepares to end. GBPJPY is expected to begin a correction wave to the upside before or just after the 155.350 price level is reached.
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