EUR/JPY – 121.11
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term down
New strategy :
Buy at 120.20, Target: 122.20, Stop: 119.60
Position: –
Target: –
Stop:-
As the single currency surged again yesterday and broke above previous resistance at 120.88, suggesting the rise from 114.85 low (wave c trough) is still in progress and upside bias is seen for further gain to resistance at 122.26, above there would encourage for headway to 122.50-60 but loss of momentum should prevent sharp move beyond 123.00-10, risk from there is seen for a retreat to take place later.
In view of this, would not chase this rise here and would be prudent to buy euro on pullback as 120.20-30 should limit downside. Only below 119.45-50 would abort and suggest top is formed instead, risk weakness to support at 118.92, break there would add credence to this view and suggest at least the first leg of 114.85 has ended, bring weakness to 118.40-50 first.
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).
