GBP/JPY – 146.70
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:
Buy at 144.50, Target: 146.70, Stop: 143.90
Position: –
Target: –
Stop: –
New strategy :
Buy at 144.50, Target: 146.70, Stop: 143.90
Position: –
Target:Â –
Stop:-
Although sterling has rebounded after finding support at 145.70 last week and gain to 147.00-10 cannot be ruled out, reckon upside would be limited to 147.75-80 and bring further consolidation below recent high of 148.10, bring another corrective fall later. Below 146.00 would bring test of support at 145.70, break there would bring retracement of recent rise to 145.10-20, however, reckon downside would be limited to 144.40-50 and bring another rise later, above 147.75-80 would signal the pullback from 148.10 has ended, bring retest of this level, break there would extend recent upmove from 135.60 to previous chart resistance at 148.45, then towards 148.90-00 but overbought condition should prevent sharp move beyond 149.50, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback as 144.50-60 should limit downside, bring another rise later. Below said support at 144.00-10 would abort and suggest a temporary top is formed instead, bring correction to 143.50-60 but reckon 143.10-15 would hold from here, bring another rise 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.



