GBP/JPY – 148.40
Bought at 148.00, stopped at 147.60
Position: – Long at 148.00
Stop: – 147.60
New strategy :
Buy at 148.50, Target: 150.30, Stop: 147.90
Although sterling dropped briefly to 147.00 yesterday, as the pound found good support there and has staged a strong rebound, suggesting low has possibly been formed there and consolidation with upside bias is seen for gain to 150.00 resistance, break there would revive bullishness and signal the fall from 151.90 top has ended, then further gain to previous resistance at 150.30 would follow but reckon 150.90-00 would hold on first testing.
In view of this, we are looking to buy sterling again on dips as 148.40-50 should limit downside. Below 148.00 would defer and risk weakness to 147.50-60 but still reckon said yesterday’s low at 147.00 would hold and 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.