GBP/JPY – 147.20
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
Buy at 144.50, Target: 146.50, Stop: 143.90
New strategy :
Buy at 146.20, Target: 148.20, Stop: 145.60
As sterling has surged again after finding renewed buying interest at 145.70, adding credence to our bullish view that recent upmove from 135.60 is still in progress and may extend further gain to 148.00, however, near term overbought condition should prevent sharp move beyond previous chart resistance at 148.45, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on pullback as 146.10-20 should limit downside, bring another rise later. Below said support at 145.70 would defer and suggest a temporary top is possibly formed, bring correction to 145.00-10 but only break of support at 144.85 would provide confirmation, bring correction to 144.50 first.
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.