GBP/JPY – 151.55
Sell at 151.80, Target: 149.80, Stop: 152.40
New strategy :
Sell at 152.20, Target: 150.20, Stop: 152.80
Although sterling has continued edging higher after recovering from 149.75, if our view that a temporary top form at 152.85 is correct, upside should be limited to 151.80-90 and 152.20-25 should hold, bring another decline, below said support at 149.75 would add credence to this view, bring retracement of recent rise to 148.90-00, however, only a drop below there would retain bearishness and bring retracement of recent rise to 148.50 and then 148.00 later.
In view of this, we are looking to sell sterling on recovery as 152.25-30 should limit upside. Above 152.50 would risk retest of said last week’s high at 152.85 but break there is needed to signal recent upmove has once again resumed and extend headway to 153.00-10 and possibly towards 153.50-60, however, 154.00 should hold, risk from there has increased for a retreat to take place 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.