GBP/JPY – 140.65
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:
Sell at 141.30, Target: 139.30, Stop: 141.90
Position: –
Target: –
Stop: –
New strategy :
Sell at 141.50, Target: 139.50, Stop: 142.10
Position: –
Target:Â –
Stop:-
As sterling found good support at 138.70 earlier this week and has staged a strong rebound, retaining our view that further consolidation above this level would be seen and corrective bounce to 141.00-10 cannot be ruled out, however, reckon upside would be limited and renewed selling interest should emerge around 141.40-50, bring another decline later, below 139.40-50 would bring another test of said support at 138.70 but break there is needed to signal the decline from 148.11 top has resumed and may extend further weakness to 138.45-50.
In view of this, would not chase this fall here and we are looking to sell sterling again on further subsequent recovery as upside should be limited to 141.40-50 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.
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.

