EUR/JPY - 134.02
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A is unfolding for gain to 135.00
Bought at 131.80, met target at 133.80
Position: - Long at 131.80
Target: - 133.80
New strategy :
Buy again at 133.40, Target: 135.40, Stop: 132.80
As the single currency has finally rallied after finding renewed buying interest at 131.86 yesterday, adding credence to our bullish view and our long position entered at 131.80 met target at 133.80 with 200 points profit, this anticipated rise confirms our view that early upmove has resumed and extend gain to 134.50, then towards psychological resistance at 135.00 but reckon near term overbought condition would limit upside to 135.50-60 and reckon 136.00-10 would hold from here.
Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with A leg unfolding in its lower degree wave c is still in progress in its wave v for further gain to135.00 and then 137.00 but reckon upside would be limited to 140.00, bring retreat later.
In view of this, as we have taken profit on our long position entered at 131.80 with 200 points profit, we are looking to buy euro again on pullback as 133.30-40 should limit downside. Only below intra-day support at 132.48 would defer and risk test of yesterday's low of 131.86 but break there is needed too signal a temporary top is possibly formed, risk correction to 131.61 support (Monday's low) first.
Our preferred count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12. Under this count, major correction has commenced in wave A which itself is a 3-waver (probably zig-zag) and may extend headway towards 135.00.
On the bigger picture, we are treating the rally to 169.97 as end of wave A, then selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), then wave (C) decline bought euro to as low as 94.12 and the strong rebound from there suggest this wave (C) as well as larger degree wave B has ended and major correction in larger degree wave C has commended for headway to 135.00 and possibly test of previous resistance at 139.26.