GBP/JPY – 145.10
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 up
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Sterling’s retreat after last week’s rise to 146.55 has retained our view that further consolidation would be seen and weakness to 144.80-85 cannot be ruled out, however, below support at 144.45-50 is needed to signal the rebound from 144.00-05 has ended, bring test of this level, break there would add credence to our view that a temporary top has been formed at 147.75 earlier this month, bring retracement of recent upmove to 143.50, then towards support at 143.30.
On the upside, above 145.80 would bring another test of said resistance at 146.55, break there would signal low has been formed at 144.05 and bring a stronger rebound to 146.90-00 and possibly towards 147.30. As near term outlook is still mixed, would be prudent to stand aside in the meantime.
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.
