GBP/JPY – 140.92
Original strategy:
Sell at 141.40, Target: 139.40, Stop: 142.00
Position: –
Target: –
Stop: –
New strategy :
Sell at 142.00, Target: 140.00, Stop: 142.60
Position: –
Target: –
Stop:-
Although the British pound retreated after meeting resistance at 141.35, reckon downside would be limited to 140.35-40 and near term upside risk remains for another corrective rebound, above 141.35 would extend the rebound from 139.35 (last week’s low) to 141.90-00 where renewed selling interest should emerge and bring another decline later, below 140.35-40 would bring weakness towards 139.80-85, break there would signal the rebound from 139.35 has ended, bring retest of this level, below would extend recent decline to 138.70 (previous support) but loss of downward momentum should prevent sharp fall below 138.30 and 138.00 should hold.
In view of this, we are looking to sell sterling on subsequent recovery as 141.90-00 should limit upside and bring such a decline. A firm break above resistance at 142.05 would suggest low is possibly formed instead, bring a stronger rebound to 142.50-60 but resistance at 143.20 should remain intact and 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.
