EUR/JPY – 119.82
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term down
Sold at 118.40, stopped at 119.00
Position: – Short at 118.40
Stop: – 119.00
New strategy :
The single currency opened sharply higher today on risk appetite, signaling a temporary low has been formed at 114.85 early last week, hence gain to 121.00 cannot be ruled out, however, as the low at 114.85 is viewed as the 2nd wave a, upside should be limited to 121.80-85 and resistance at 122.26 should remain intact, bring another decline later.
On the downside, although the pullback from 120.88 may bring pullback to 118.95-00, reckon downside would be limited to 118.40-50 and previous resistance at 117.82 (now support) should hold and bring another rise later. Below 117.30-35 would suggest top is possibly formed instead, then test of Friday’s low at 116.46 would follow but only a break below this level would provide confirmation.
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).