EUR/JPY – 130.38
New strategy :
Buy at 129.70, Target: 131.70, Stop: 129.10
Last week’s rally above previous resistance at 130.40 signals early fall from 131.40 has ended at 127.56 and mild upside bias is seen for further gain to 131.10-15, however, break there is needed to retain bullishness for retest of said recent high at 131.40, once this level is penetrated, this would extend early upmove to 131.90-00 but near term overbought condition should prevent sharp move beyond 132.50-60.
On the downside, whilst pullback to 130.00 cannot be ruled out, reckon 129.60-70 would limit downside and bring another rise. Below 129.10-15 would defer and suggest top is formed instead, risk weakness to 128.75-80 but still reckon 128.30-35 support would remain intact and bring another rise later this week.
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).