Trade Idea: GBP/JPY – Buy at 149.95

GBP/JPY – 150.95

Original strategy:

Buy at 144.75, Target: 146.75, Stop: 144.15 

Position: –
Target: –
Stop: –

New strategy :

Buy at 149.95, Target: 151.95, Stop: 149.35

Position: –
Target:  –
Stop:-

Sterling only eased to 145.25 yesterday before staging the anticipated rally, the British pound found renewed buying interest today at 146.65 and has surged again, upmove accelerated after breaking above resistance at 148.35, adding credence to our latest preferred count that triangle wave B correction has ended at 139.35 (the final e leg of triangle), hence wave C has commenced and may extend further gain to 152.00 and 153.00, however, near term overbought condition should limit upside to 154.00-10 and price should falter below 155.00 today. 

In view of this, we are still looking to buy sterling on pullback but at a higher level as 150.00 should limit downside. below 149.50 would risk correction to 149.00 but still reckon downside would be limited to previous resistance at 148.35 and 147.75-80 should hold, bring another upmove 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.