EUR/JPY – 122.88
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
New strategy :
Buy at 112.60, Target: 114.60, Stop: 112.00
Although the single currency slipped to 121.58 last week, as euro found renewed buying interest there and staged a strong rebound to 123.86, suggesting the pullback from 124.10 top has possibly ended there and consolidation with upside bias is seen, break of 123.86 would add credence to this view, bring retest of 124.10 but above there is needed to confirm recent upmove has resumed in wave v of larger degree wave iii to 124.40-50, then towards 125.00.
In view of this, we are looking to reinstate long on dips. Below 122.00 would defer and risk another test of said support at 121.58 but break there is needed to signal temporary top has been formed, bring retracement of recent upmove to 121.10-20 and possibly test of support at 120.91.
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 which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.
Our larger degree 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, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).