GBP/JPY – 146.05
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 :
Buy at 145.55, Target: 147.55, Stop: 144.95
Position: –
Target:Â –
Stop:-
As sterling found renewed buying interest at 144.85 and has staged a strong rebound, suggesting the retreat from 146.55 has ended there and consolidation with upside bias is seen for another test of this level, above there would signal low has been formed at 144.05 early last week and bring a stronger rebound to 146.90-00 and possibly towards 147.30.
In view of this, we are looking to buy sterling on dips. Below said support at 144.85 would abort and prolong consolidation, risk weakness to 144.45-50 but said support at 144.05 would hold from here, bring recovery later. A break of said support at 144.05 would add credence to our view that a temporary top has been formed at 147.75 earlier last month, bring retracement of recent upmove to 143.50, then towards support at 143.30.
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.

