EUR/JPY – 130.48
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term up
Original strategy:
Bought at 130.70, stopped at 130.40
Position: – Long at 130.70
Target: –
Stop: – 130.40
New strategy :
Stand aside
Position: –
Target:Â –
Stop:-
Despite rebounding to 131.12 on Friday, the single currency ran into renewed selling interest there and has dropped sharply, dampening our bullishness and suggesting a temporary top has possibly been formed at 131.40 last week, hence downside risk remains for the retreat from there bring weakness to 130.00, then support at 129.84, break there would add credence to this view, bring retracement of recent rise to 129.54 and later towards 129.00.
In view of this, would be prudent to stand aside in the meantime. Above 130.90 would bring another test of 131.12 but only break of latter level would signal the retreat from 131.40 has ended, bring retest o this level later. Once this resistance is penetrated, this would confirm recent upmove has resumed and extend gain to 131.60, then 132.00-10, however, loss of upward momentum should prevent sharp move beyond 132.50-60 and reckon 132.90-00 would hold from here.
Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.
Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i – 105.44, wave ii- 123.33, wave iii – 97.03, wave iv – 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).
