EUR/JPY – 133.27
New strategy :
Buy at 132.70, Target: 134.30, Stop: 132.20
Although the single currency fell to as low as 132.26, as euro found decent demand there and has staged a strong rebound, suggesting the pullback from 134.38 has possibly ended there and consolidation with mild upside bias is seen for gain to 134.00-05, however, break there is needed to add credence to this view and extend gain to said resistance. Looking ahead, only a break of recent high at 134.50 would retain bullishness and signal a resumption of early upturned has occurred, bring headway to 135.00-10 first.
In view of this, we are looking to buy euro again on dips. as 132.60-70 should limit downside. Only break of said support at 132.26 would abort and shift risk back to the downside for the fall from 134.38 towards 131.90-00, then test of support at 131.72 which is likely to hold on first testing.
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).