EUR/JPY – 128.10
Bought at 129.45, stopped at 128.85
Position: – Long at 129.45
Stop: – 128.85
New strategy :
Despite rising to 130.40 earlier this week, as the single currency ran into renewed selling interest there and has dropped sharply, dampening our bullishness and signaling another leg of decline from 131.40 top is underway, hence further weakness to 127.50 and later 127.00-10 would be seen, however, near term oversold condition would limit downside to 126.50-60, risk from there is for a rebound to take place next week.
In view of tis, would not chase this fall here and would be prudent to stand aside in the meantime. Above 128.60-70 would bring test of 129.10-15 but break of latter level is needed to signal low is formed instead, bring a stronger rebound to 129.50-60 and possibly towards 130.00. Looking ahead, only break of said resistance at 130.40 would revive bullishness and signal the fall from 131.40 has ended, then gain to 130.90-00 would follow.
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).