GBP/JPY – 136.75
Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.
Trend: Near term down
New strategy :
Buy at 136.00, Target: 138.00, Stop: 135.40
Position: –
Target: –
Stop:-
Sterling found good support at 135.60 early last week and staged a strong rebound from there, suggesting a temporary low has been formed there and consolidation with mild upside bias is seen for this move to bring retracement of recent decline, above resistance at 137.30-35 would add credence to this view, then further subsequent gain to 138.00 and possibly test of resistance at 138.25 would be seen, however, near term overbought condition should limit upside to resistance at 138.70 and price should falter well below resistance at 139.00.
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.
On the downside, although initial pullback to 136.00-10 cannot be ruled out, reckon 135.70-75 would contain downside and bring another rise later. Only below said support at 135.60 would abort and signal recent decline has resumed, then further fall to 135.00, then 134.40-50 would follow.
