EUR/JPY – 131.31
Original strategy:
Bought at 129.70, met target at 131.70
Position: – Long at 129.70
Target: – 131.70
Stop: –
New strategy :
Buy at 130.50, Target: 132.50, Stop: 129.90
Position: –
Target:Â –
Stop:-
The single currency has rallied after finding renewed buying interest at 129.66 yesterday, justifying our bullishness and our long position entered at 129.70 just met our upside target at 131.70 today, this anticipated breach of previous resistance at 131.40 confirms our view that recent upmove has resumed and extend gain to 132.00-10 but near term overbought condition should prevent sharp move beyond 132.50-60 and reckon 133.00-10 would hold from here, bring retreat later.
As we have taken profit on our long position entered at 129.70, would not chase this rise here and we are looking to buy euro on subsequent pullback as 130.45-50 should limit downside and bring another rise later. Below 130.00 would risk another test of said support at 129.66 but only break there would signal top is formed instead, risk correction to 129.10-15.Â
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).
