EUR/JPY – 133.13
New strategy :
Despite falling to 131.72 earlier this week, as euro found good support there and has staged another strong rebound, mild upside bias is seen for gain to 133.50, however, as broad outlook remains consolidative, reckon upside would be limited to 133.89 (last week’s high) and bring further choppy trading. In the event euro breaks above said resistance at 133.89, this would revive bullishness and signal entire correction from 134.50 has ended, bring retest of this level first.
In view of this, would not chase this rise here and would be prudent to stand aside for now. below 132.65-70 would bring pullback to 132.35-40 but break of latter level is needed to signal top is formed, bring weakness to 132.00-05, however, said support at 131.72 (this week’s low) should remain intact, bring rebound later. 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).