GBP/JPY – 146.10
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 145.90, Target: 143.90, Stop: 146.50
Position: – Short at 145.90
Target: – 143.90
Stop: – 146.50
New strategy :
Hold short entered at 145.90, Target: 143.90, Stop: 146.50
Position: – Short at 145.90
Target:Â – 143.90
Stop:- 146.50
Although sterling edged higher to 146.40 yesterday, the subsequent retreat has retained our bearishness and as long as this level holds, mild downside bias remains for another retreat, below 145.40-45 would bring test of 144.50 but break there is needed to signal the rebound from 144.05 has ended, bring retest of this level later. A drop below 144.05 would add credence to our view that a temporary top has been formed at 147.75 earlier this month, bring retracement of recent upmove to 143.50, then towards support at 143.30.
In view of this, we are holding on to our short position entered at 145.90. Above resistance at 146.40 would abort and signal low is formed instead, bring a stronger rebound to 146.90-00 and possibly towards 147.30.
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.

