EUR/JPY – 122.36
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term up
Original strategy:
Buy at 120.20, Target: 122.20, Stop: 119.60
Position: –
Target: –
Stop: –
New strategy :
Buy at 120.65, Target: 122.85, Stop: 120.05
Position: –
Target:Â –
Stop:-
Although the single currency has surged again after brief pullback and broke above previous resistance at 122.01 and near term upside bias remains for further gain to 122.55-60, loss of upward momentum should prevent sharp move beyond previous resistance at 122.89 (b leg top) and price should falter below 123.50-60, risk from there has increased for a retreat to take place later this week.
In view of this, would not chase this rise here and would be prudent to buy euro on subsequent pullback as 120.60-65 should limit downside. Below 120.25-30 would defer and suggest top is possibly formed, risk weakness to 120.00, then 119.45-50 but reckon support at 118.92 would contain downside and euro may stage another rally from there.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).
