FX.co ★ Elliott wave analysis for GBP/JPY on December 28, 2022

GBP/JPY could have completed the first two waves of wave 5/ higher and if this is the case, then we should see GBP/JPY continue higher towards 178.40 in the coming weeks. That said, we have an alternative scenario with almost equal odds calling for more downside action to complete a complex correction in wave 4/. If this scenario proves to be correct then a decline below 155.93 with the possibility of a deep decline to 149 before starting to move higher will become possible.

Therefore we recommend waiting for a break above minor resistance at 169.28 before engaging here as the risk of being caught on the wrong side of a trade is too large.