EUR/JPY – 131.35
Original strategy:
Bought at 131.35, Target: 133.35, Stop: 130.75
Position: – Long at 131.35
Target: – 133.35
Stop: – 130.75
New strategy :
Exit long entered at 131.35,
Position: – Long at 131.35
Target:Â –
Stop:-
Despite rising to 132.01 earlier this week the subsequent retreat suggests consolidation below this level would be seen and near term downside risk has increased for correction to 130.91 support, break there would suggest a temporary top is possibly formed, bring further fall to 130.50-60 and later towards 130.25-30 but downside should be limited to this week’s low at 129.95, bring another rise later.
In view of this, would be prudent to exit long entered at 131.35 and stand aside for now. Above 131.60-65 would bring another rise to 132.01 but break there is needed to signal recent upmove has once again resumed and extend gain to 132.40-50, then towards 133.00-10, however, near term overbought condition should prevent sharp move beyond 133.50 and upside should be limited to 133.90-00.
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).
