GBP/JPY – 149.15
Original strategy:
Sold at 150.20, Target: 148.20, Stop: 150.20
Position: – Short at 150.20
Target: – 148.20
Stop: – 150.20
New strategy :
Hold short entered at 150.20, Target: 148.20, Stop: 149.80
Position: – Short at 150.20
Target: – 148.20
Stop:- 149.80
As sterling has rebounded after marginal fall to 148.45, consolidation above this level would be seen, however, reckon resistance at 149.70 would limit upside and bring another decline later, below said support at 148.45 would extend the fall from 151.90 top to 148.00, then test of previous support at 147.80 but oversold condition should limit downside and support at 147.30 should remain intact.
In view of this, we are holding on to our short position entered at 150.20. Only above resistance at 150.30 would defer and risk test of previous support at 150.60-65 but break there is needed to signal low is formed, bring a stronger rebound to 151.10-20, however, still reckon upside would be limited to 151.55-60 and price should falter well below said resistance at 151.90 (last week’s high), bring another retreat 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.
