GBP/JPY – 143.68
Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.
Trend: Near term up
Original strategy:
Buy at 141.70, Target: 143.70, Stop: 141.00
Position: –
Target: –
Stop: –
New strategy :
Buy at 142.30, Target: 144.30, Stop: 141.70
Position: –
Target: –
Stop:-
As sterling has surged again after brief pullback, adding credence to our view that recent upmove from 135.60 has resumed and upside bias remains for this move to extend further gain to 144.00-10, however, near term overbought condition should prevent sharp move beyond 144.40-50 and reckon previous chart resistance at 144.75 would remain intact, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on pullback as 142.30-40 should limit downside. Below 141.60-65 would defer and suggest top is possibly formed instead, risk correction to 141.00-10 but downside should be limited to 140.55-60 and price should stay well above support at 140.10, bring another rally.
Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.
