GBP/JPY – 144.34
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:
Sell at 147.00, Target: 145.00, Stop: 147.60
Position: –
Target: –
Stop: –
New strategy :
Sell at 145.30, Target: 143.30, Stop: 145.90
Position: –
Target: –
Stop:-
Sterling has remained under pressure after last week’s selloff, suggesting temporary top has been formed at 147.75 earlier this month and consolidation with mild downside bias remains for this fall to bring retracement of recent upmove to 143.50, then towards support at 143.30, however, near term oversold condition should limit downside to 142.90-00 and price should stay above previous resistance at 142.50, bring rebound later.
In view of this, would not chase this fall here and we are looking to sell sterling on recovery as 145.30 should limit upside, bring another decline. Above 145.70-75 would defer and risk a stronger rebound to 146.00 but still reckon resistance at 146.30-35 would limit upside and bring another decline later.
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.
