EUR/JPY – 132.85
Original strategy:
Bought at 133.20, stopped profit at 133.50
Position: – Long at 133.20
Target: –
Stop: – 133.50
New strategy :
Sell at 133.50, Target: 131.50, Stop: 134.10
Position: –
Target:Â –
Stop:-
Although the single currency rose marginally to 134.50, lack of follow through buying on break of previous resistance at 134.41 and the subsequent selloff dampened our bullishness and suggests a temporary top has possibly been formed there, hence consolidation below this level is seen with downside bias for test of 132.47 support, break there would add credence to this view, bring retracement of recent rise to 132.00, then towards support at 131.66 which is likely to hold from here.
In view of this, we are looking to turn short on recovery as 133.40-50 should limit upside and bring another decline later. Above 133.95-00 would defer and suggest the retreat from 134.50 has ended instead, however, still reckon said resistance at 134.50 would hold, bring further choppy consolidation later.
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).
