GBP/JPY – 144.20
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:
Sell at 145.50, Target: 143.50, Stop: 146.10
Position: –
Target: –
Stop: –
New strategy :
Sell at 145.50, Target: 143.50, Stop: 146.10
Position: –
Target: –
Stop:-
Sterling has remained under pressure after recent selloff from 146.80 (last week’s high), adding credence to our view that the rebound from 144.05 has ended there, hence downside bias remains for another fall to said support, however, break there is needed to retain 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 sell cable on subsequent recovery as 145.60-70 should limit upside. Above 146.00-10 would dampen this bearish scenario and risk a strong rebound to 146.50 but only break of said resistance at 146.80 would revive bullishness and signal correction from 147.75 has ended instead, bring further gain to 147.30-35 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.
