GBP/JPY – 141.55
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 down
Original strategy:
Bought at 141.50, Target: 143.50, Stop: 140.90
Position: – Long at 141.50
Target: – 143.50
Stop: – 140.90
New strategy :
Exit long entered at 141.50,
Position: – Long at 141.50
Target:Â –
Stop:-
Despite intra-day brief rise to 142.50, lack of follow through buying and the subsequent retreat after faltering below indicated previous resistance at 142.75 suggest a temporary top is possibly formed and consolidation below this level would be seen, near term downside risk has increased for further fall to 141.00, then towards 140.40-50, however, still reckon downside would be limited to 140.15-20 and price should stay above 140.00, bring another rebound later.
In view of this, would be prudent to exit long and look to buy sterling again on subsequent retreat. Above said resistance at 142.50 would signal the rise from 138.70 low is still in progress for retracement of recent selloff to 143.05-10, then 143.50-60 but near term overbought condition should limit upside to resistance at 143.95-00.
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.

