EUR/JPY – 130.03
Original strategy:
Bought at 130.30, stopped at 129.90
Position: – Long at 130.30
Target: –
Stop: – 129.90
New strategy :
Stand aside
Position: –
Target:Â –
Stop:-
As the single currency has fallen again today after meeting renewed selling interest at 130.71 yesterday, suggesting near term downside risk remains for the retreat from 131.71 top to bring test of support at 129.66, however, break there is needed to retain near term bearishness, bring retracement of recent upmove to 129.10-15, then towards 128.70-75 but support at 128.49 should remain intact.
In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above said resistance at 130.71 would revive bullishness and suggest low is possibly formed, bring rebound to 131.00, then test of 131.35, break of latter level would indicate the retreat from 131.71 has ended, bring rest of this level first, above there would confirm recent upmove has resumed and extend gain to 132.00-10 but reckon upside would be limited to 132.50-60 and 133.00-10 should hold from here.
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).
