GBP/JPY – 148.65
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Although sterling edged higher again today and near term upside risk remains for the rebound from this week’s low of 146.95 to extend gain to 149.50-55, as this move is viewed as retracement of recent decline, reckon upside would be limited to 149.90-00 and resistance at 150.25 should hold from here, bring another decline later.
On the downside, below 147.80-85 would suggest top is formed, bring weakness to 147.30-35, break there would signal the rebound from 146.95 has ended, bring retest of this level but break there is needed to confirm the fall from 152.85 top has resumed for retracement of recent upmove to 146.60-65 and then 146.00, having said that, loss of momentum should limit downside and previous support at 145.25 should remain intact.
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.
