EUR/JPY – 132.33
Original strategy:
Sell at 132.70, Target: 130.95, Stop: 133.30
Position: –
Target: –
Stop: –
New strategy :
Sell at 132.90, Target: 130.90, Stop: 133.50
Position: –
Target: –
Stop:-
As euro has rebounded again today, retaining our view that near term consolidation above support at 131.66 would be seen and another bounce to 132.50 cannot be ruled out, however, reckon upside would be limited to 132.90-00 and bring another decline, below said support would add credence to our view that the decline from 134.41 top is still in progress and bearishness remains for this move to bring retracement of recent upmove to 130.95-00 but oversold condition should limit downside to support at 130.62 and reckon psychological support at 130.00 would remain intact.
In view of this, we are looking to reinstate short on recovery as 132.90-00 should limit upside. Only above indicated resistance at 133.50 would abort and risk further gain towards 134.00 but only break there would signal the correction from 134.41 has ended at 131.75, bring retest of this recent high. Once this level is penetrated, this would confirm recent uptrend has resumed and extend headway to 135.00-10 and later 135.50-60.
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).
