Trade Idea: EUR/JPY – Buy at 132.20

EUR/JPY – 132.79

Original strategy:

Exit long entered at 131.35,

Position: – Long at 131.35
Target: –
Stop: –

New strategy :

Buy at 132.20, Target: 134.20, Stop: 131.60

Position: –
Target:  –
Stop:-

Although the single currency slipped to as low as 130.62, as renewed buying interest emerged there and euro has rallied above resistance t 132.01 today, reviving our bullishness and signal recent upmove is still in progress, hence further gain to 133.00-10, then 133.50-60 would be seen, however, near term overbought condition should prevent sharp move beyond 134.00-10 and reckon 134.50-60 would hold from here, risk from there has increased for a retreat later. 

In view of this, we are looking to reinstate long on pullback as 132.20 should limit downside and previous resistance at 132.01 (should turn into support) and bring another rise later. Below 131.60-70 would defer and risk retreat to 131.00-10 but said support at 130.62 should remain intact, bring another rise later. 

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).