GBP/JPY – 139.95
Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.
Trend: Near term down
Original strategy:
Exit long entered at 141.50,
Position: – Long at 141.50
Target: –
Stop: –
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Sterling’s selloff after meeting strong resistance at 142.50 dampened our bullishness and suggests the rebound from 138.70 has ended there and downside risk remains for weakness towards support at 139.15, however, break there is needed to add credence to this view and signal recent decline has resumed for retest of 138.70, then towards 138.00-10 later which is likely to hold from here due to near term oversold condition.
On the upside, whilst recovery to 139.65-70 cannot be ruled out, reckon upside would be limited to 141.15-20 and bring another decline later. Only above 141.80 would revive bullishness and suggest the retreat from 142.50 has ended, bring another test of this level first. Once this resistance is penetrated, this would signal the erratic rise from 138.70 is still in progress or test of indicated previous resistance at 142.75, above there would signal recent decline has ended and encourage for at least a strong retracement of recent selloff to 143.05-10.
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.
