GBP/JPY – 145.60
Buy at 142.45, Target: 144.45, Stop: 141.85
New strategy :
Buy at 144.80, Target: 146.80, Stop: 144.20
As sterling’s upmove has accelerated after breaking above resistance at 143.00, suggesting the entire a-b-c correction from 147.75 ha ended at 139.35 and bullishness remains for this rise from 139.35 to extend further gain towards resistance at 146.80 (b leg top), however, a sustained breach above there is needed to retain bullishness and extend further gain to 147.30-40 and later towards said recent high at 147.75 which is likely to hold from here due to near term overbought condition,
In view of this, we are looking to buy sterling on pullback but at a higher level as 144.80-90 should limit upside. Only below said previous resistance at 143.00 (tentatively wave i top) would abort and signal top is formed instead, bring weakness to 142.50, then 142.20-25, however, reckon support at 141.30-35 would remain intact, bring another rebound 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.