EUR/JPY – 131.75
Bought at 132.95, stopped at 132.35
Position: – Long at 132.95
Stop: – 132.35
New strategy :
Although the single currency slipped again to 131.23 earlier today, as price has rebounded again after holding above previous support at 131.17 (this week’s low), suggesting further consolidation would take place and another bounce to 132.15-20 cannot be ruled out but upside should be limited to resistance at 132.47 and bring another decline later. Below 131.17 would signal the fall from 134.50 top is still in progress, then this erratic decline may extend weakness to 130.60-65 and possibly towards psychological level at 130.00 which is likely to hold from here.
On the upside, only break of said resistance at 132.47 would abort and signal a temporary low has been formed at 131.17, bring further gain to 133.15-20 but break there is needed to signal the entire correction from 134.50 top has ended, bring further gain to 133.50, then towards resistance at 133.89 (last week’s high) which is expected to cap euro’s upside. As near term outlook is mixed, would be prudent to stand aside for now.
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).