GBP/JPY – 150.75
Sell at 152.20, Target: 150.20, Stop: 152.80
New strategy :
Sell at 151.00, Target: 149.00, Stop: 151.60
As sterling has retreated after meeting resistance at 151.60, suggesting consolidation with mild downside bias would be seen and weakness to 150.15-20 is likely, break there would signal another leg of corrective decline from 152.85 top is underway, bring test of support at 149.75 but break there is needed to retain bearishness and bring retracement of recent rise to 148.90-00, however, only a drop below there would bring further fall to 148.50 and then 148.00 later.
In view of this, we are looking to sell sterling on minor recovery as 151.00 should limit upside. Above said resistance at 151.60 would risk a stronger rebound to 152.00, however, still reckon upside would be limited to 152.25-30 and bring further consolidation. 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.
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.