GBP/JPY – 140.55
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
New strategy :
Sell at 141.30, Target: 139.30, Stop: 141.90
Position: –
Target: –
Stop:-
Sterling met renewed selling interest at 142.75 yesterday and has dropped again on pound’s broad-based weakness after UK election, reviving our bearishness for the decline from 148.10 top to extend further fall to 139.50, then towards previous support at 139.20, however, near term oversold condition should limit downside to 138.75-80 and price should stay above 138.00-10.
In view of this, we are looking to sell sterling again on recovery as upside should be limited to 141.30-40 and bring another decline. Above 141.90-00 would defer and risk rebound to 142.40-50 but said resistance at 142.75 should limit upside and bring another selloff later next week.
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.
