EUR/JPY – 132.94
Original strategy:
Sold at 132.70, Target: 130.70, Stop: 133.30
Position: – Short at 132.70
Target: – 130.70
Stop: – 133.30
New strategy :
Hold short entered at 132.70, Target: 130.70, Stop: 133.30
Position: – Short at 132.70
Target: – 130.70
Stop:- 133.30
Although the single currency has continued trading with a firm undertone and marginal gain from here cannot be ruled out, as this move from 131.45 is viewed as retracement of the fall from 134.50, reckon upside would be limited and resistance at 132.96 should hold, bring retreat later, below 132.25-30 would bring weakness to 131.90-95 but break of latter level is needed to signal the rebound from 131.45 has ended, bring retest of this level, below there would extend the fall from 134.50 for a correction of early upmove to 131.00, then towards 130.50-60.
In view of this, we are holding on to our short position entered at 132.70. Above 133.10 would defer and suggest first leg of corrective decline from 134.50 top has ended, risk a stronger rebound to 133.50-60 but still reckon upside would be limited to 133.95-00, price should falter well below said last week’s high at 134.50, bring another selloff 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).
