GBP/JPY – 142.33
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 down
Original strategy:
Sold at 142.50, Target: 140.50, Stop: 143.10
Position: – Short at 142.50
Target: – 140.50
Stop: – 143.10
New strategy :
Hold short entered at 142.50, Target: 140.50, Stop: 142.80
Position: – Short at 142.50
Target:Â – 140.50
Stop:- 142.80
Although sterling found support at 141.25 on Friday and staged a rebound, reckon upside would be limited to 142.75-80 and bring another decline, below 141.80-85 would bring retest of said support at 141.25 but break there is needed to confirm recent decline has resumed and extend recent decline from 147.75 top for retracement of early upmove to 140.80-85 (1.618 times projection of 147.75-144.05 measuring from 146.80), however, oversold condition should prevent sharp fall below 140.50 and reckon psychological support at 140.00 would hold from here.
In view of this, we are holding on to our short position entered at 142.50. Above 142.80 would defer and risk a stronger rebound to indicated resistance at 143.30, however, a sustained breach above this level is needed to signal a temporary low is formed, bring further subsequent gain towards 143.90-00.Â
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.

