GBP/JPY – 142.00
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
Original strategy:
Sold at 140.40, stopped at 141.00
Position: – Short at 140.40
Target: –
Stop: – 141.00
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Sterling’s rebound from 138.70 turned out to be stronger than expected, suggesting low has been formed there and consolidation with mild upside bias is seen for test of resistance at 142.75, however, break there is needed to add credence to this view, bring retracement of recent selloff to 143.05-10, then 143.50-60 but near term overbought condition should limit upside to resistance at 143.95-00.
In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 141.40-50 would bring test of previous resistance at 140.90 but break of latter level is needed to signal the rebound from 138.70 has possibly ended, bring further fall to 140.50, then 140.15-20 which is likely to hold from here.
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.
