GBP/JPY – 144.75
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:
Bought at 145.55, stopped at 145.35
Position: – Long at 145.55
Target: –
Stop: – 145.35
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Despite yesterday’s marginal rise to 146.80, lack of follow through buying and the subsequent sharp retreat dampened our bullishness and suggest the rebound from 144.05 support has ended there, hence downside risk is seen for weakness towards this support, however, break there is needed to retain near term bearishness and signal another leg of corrective decline from 147.75 top is underway, then further fall to 143.50 and later test of support at 143.30 would follow.
In view of this, would not chase this fall here and would be prudent to stand aside for now. Above 145.40-45 would bring recovery towards 145.90-00, however, as outlook remains consolidative, price should falter below said resistance at 146.80, bring another decline 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.
