EUR/JPY – 133.35
New strategy :
Despite staging a rebound from 132.91 to 134.05 (yesterday’s high), lack of follow through buying and the subsequent retreat suggest further choppy trading would be seen and weakness towards said support at 132.91 cannot be ruled out, however, break there is needed to signal a temporary top has been formed at 134.38, bring retracement of recent rise to 132.65 and later towards 132.00-10 but support at 131.72 should remain intact.
On the upside, expect recovery to be limited to 133.75 and said resistance at 134.05 should remain intact, bring further choppy trading. Only a daily close above yesterday’s high at 134.05 would revive bullishness and signal the retreat from 134.38 (last week’s high) has ended, bring retest of this level later, above there would bring test of strong resistance at 134.50 but only break there would retain bullishness and extend gain to 135.00-10 first.
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).