GBP/JPY – 139.25
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 down
Original strategy:
Sell at 141.50, Target: 139.50, Stop: 142.10
Position: –
Target: –
Stop: –
New strategy :
Sell at 140.40, Target: 138.50, Stop: 141.00
Position: –
Target:Â –
Stop:-
As sterling has retreated after meeting resistance at 140.90 yesterday, suggesting the rebound from 138.70 has possibly ended there and consolidation with downside bias remains, break of said support at 138.70 would confirm recent decline from 148.10 top has resumed for further subsequent weakness to 138.45-50, then towards 138.00, however, near term oversold condition should limit downside to 137.50 today.
In view of this, would not chase this fall here and we are looking to sell sterling again on recovery as 140.40-50 should limit upside. Above said resistance at 140.90 would defer and risk a stronger recovery to 141.15-20, then 141.50, however, still reckon upside would be limited to 142.00 and price should falter below resistance at 142.75, bring another decline later.Â
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.

