EUR/JPY – 130.44
Original strategy:
Sold at 130.20, Target: 128.20, Stop: 130.80
Position: – Short at 130.20
Target: – 128.20
Stop: – 130.80
New strategy :
Hold short entered at 130.20, Target: 128.20, Stop: 130.80
Position: – Short at 130.20
Target: – 128.20
Stop:- 130.80
Although the single currency opened higher today and has rebounded, as long as resistance at 130.67 holds, mild downside bias remains for another retreat, below 129.80-85 would suggest the rebound from 129.46 has ended, bring another fall to 129.37 support, break there would signal another leg of decline from 131.71 top is underway for retracement of recent rise to 129.10-15, then towards 128.70-75 but support at 128.49 should remain intact.
In view of this, we are holding on to our short position entered at 130.20. Above 130.65-70 would risk another test of said resistance at 131.09, however, only break there would suggest the retreat from 131.71 has possibly ended, then gain to 131.35 would follow, above there would confirm and a retest of said recent high at 131.71 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).
