Fibonacci extension levels project a very low weekly target for GBP/JPY

• GBP has had a tough week and the pair is 0.72% lower on Friday and over 2% lower on the week.
• There are some projected targets below the psychological 120.00 level.

GBP/JPY weekly chart

It has been a very tough week for GBP. The market clearly thought the Bank of England could have done more to support the pound after the GBP 100bln was priced into the expectations of the market. One of the key hawkish comments was the fact that the BoE believes that the amount of liquidity in the market is sufficient. The BoE then announced that the purchase speed will slow down and the currency dropped. 

Looking a the implications of the fundamental information the chart below reflects the bearishness. The weekly candle could close very close to the lows (Marubozu). Looking at the wave analysis and the next support is holding at 129.54 and if this level breaks the next is the red support line at the 125.00 psychological level. 

The Fibonacci extension lines measuring the previous wave higher show that if the support zones do give way the old support just above 1.15 is the target. This is obviously a pretty long term scenario but it cannot be ignored. 

Additional levels