GBP/JPY – 141.10
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 up
Original strategy:
Sold at 143.65, met target at 141.65
Position: – Short at 143.65
Target: – 141.65
Stop: –
New strategy :
Sell at 142.00, Target: 140.00, Stop: 142.60
Position: –
Target:Â –
Stop:-
As sterling has remained under pressure after recent anticipated selloff, suggesting recent selloff from 148.10 top is still in progress and bearishness remains for this move to extend weakness to 140.50-55, then towards psychological support at 140.00, however, near term oversold condition should prevent sharp fall below previous support at 139.20, risk from there has increased for a rebound later.Â
In view of this, would not chase this fall here and would be prudent to sell sterling again on recovery as 142.00-10 should limit upside and bring another decline later. Above 142.55-60 would suggest low is possibly formed, risk a stronger rebound towards resistance at 143.10 but a sustained breach above there is needed to confirm, bring a stronger rebound towards resistance at 143.95-00.
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.

