GBP/JPY – 145.23
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:
Sell at 147.00, Target: 145.00, Stop: 147.60
Position: –
Target: –
Stop: –
New strategy :
Sell at 147.00, Target: 145.00, Stop: 147.60
Position: –
Target: –
Stop:-
Sterling has fallen again after brief recovery, adding credence to our view that further consolidation below last week’s high at 147.75 would be seen and mild downside bias remains for retracement of recent upmove and weakness to 144.70, then 144.50 is likely, however, near term oversold condition should limit downside to 144.20 and price should stay well above 143.30, bring rebound later.
In view of this, would not chase this fall here and we are looking to sell sterling on recovery as 147.00 should limit upside, bring another decline. Above 147.60 would risk test of said resistance at 147.75 but break there is needed to revive bullishness and extend recent upmove to previous resistance at 148.10, above there would bring headway to 148.50, then towards 149.00.
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.
