GBP/JPY – 151.75
Buy at 148.50, Target: 150.30, Stop: 147.90
New strategy :
Buy at 150.50, Target: 152.50, Stop: 149.90
Although sterling’s rally above previous resistance at 151.90 adds credence to our view that entire correction from 152.85 top has ended at 146.95 earlier, as price has retreated from 152.45, minor consolidation would be seen and pullback to 150.90-00 cannot be ruled out, however, reckon 150.4050 would contain downside and bring another rise later. Above said resistance at 152.45 would bring a retest of 152.85 but break there is needed to confirm early uptrend has resumed for headway to 153.50, then 154.00-10 later.
In view of this, we are looking to buy sterling again on pullback as 150.40-50 should limit downside. Below 149.90-00 would defer and risk test of 149.35-40 but break there is needed to signal top is formed instead, risk further weakness to 148.90-00 first, however, support at 148.65 should hold from here.
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.