EUR/JPY – 119.93
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term up
Bought at 121.30, stopped at 120.80
Position: – Long at 121.30
Stop: – 120.80
New strategy :
Although the single currency edged higher again, lack of follow through buying and the subsequent retreat from 120.44 suggest further consolidation is in store, near term upside risk remains for the corrective bounce from 119.32 to extend gain to 120.60-70, however, as this move is viewed as retracement of recent decline, reckon upside would be limited to 121.15-20, bring retreat later. Only break of 121.84 resistance would revive bullishness and signal the fall from 122.89 has ended, bring further gain to 122.25-30 first.
On the downside, below 119.70 support would bring test of said support at 119.54 but break there is needed to signal the fall from 122.89 top has resumed and may extend weakness to 119.00, then 118.67 support but loss of momentum should prevent sharp fall below latter level and price should stay well above previous chart support at 118.25, risk from there is seen for a rebound later.
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).