GBP/JPY – 142.80
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 143.60, Target: 141.60, Stop: 144.20
Position: –
Target: –
Stop:-
As sterling’s decline has accelerated especially after the break of previous support at 144.05 (now resistance), adding credence to our view that the decline from 147.75 top is still in progress, hence bearishness remains for this decline to extend weakness to 142.00-10, however, near term oversold condition should prevent sharp fall below 141.50 and price should stay above 141.00, bring rebound later.
In view of this, would not chase this fall here and would be prudent to sell sterling on recovery as 143.50-60 should limit upside and bring another decline later. Above previous support at 144.05 would defer and suggest a temporary low is formed instead, risk a stronger rebound to 144.40-50 but price should falter below resistance at 145.30, 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.
