GBP/JPY – 141.20
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
Original strategy:
Exit long entered at 139.10,
Position: – Long at 139.10
Target: –
Stop: –
New strategy :
Stand aside
Position: –
Target:Â –
Stop:-
Although sterling did surge in line with our previous bullishness and price rose to as high as 142.10 earlier today, the subsequent retreat suggests consolidation below this level would be seen and pullback to 140.60-65 cannot be ruled out, however, reckon downside would be limited to 140.00 and price should stay well above support at 139.20 (Friday’s low), bring another rise later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback. Above 141.70-80 would bring retest said intra-day resistance at 142.10 but break there is needed to revive bullishness and extend the rise from 135.60 low to 142.50, then towards 142.90-00 later.
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.



