Elliott Wave Daily

Trade Idea: EUR/JPY - Stand aside

Typography

EUR/JPY - 131.25


Original strategy:

Sold at 130.20, stopped at 130.80

Position: - Short at 130.20
Target: -
Stop: - 130.80


New strategy :

Stand aside

Position: -
Target:  -
Stop:-


Euro’s rebound from 129.46 turned out to be much stronger-than-expected, dampening our bearishness and the breach of previous resistance at 131.09 suggests the retreat from 131.71 has possibly ended and gain to 131.55-60 is likely, however, break of said resistance at 131.71 is needed to revive bullishness and confirm recent upmove has resumed and extend further gain to 132.40-50 later.

In view of this, would not chase this rise here and would be prudent to stand aside for now, Below 130.65-70 would bring pullback to 130.25-30, break there would suggest the rebound from 129.37 has ended and prolong choppy trading, risk weakness to 129.95 and possibly 129.60 but said support at 129.37 should remain intact.

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).

On the bigger picture, we are treating the rally to 169.97 as end of wave A, then selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), then wave (C) decline bought euro to as low as 94.12 and the strong rebound from there suggest this wave (C) as well as larger degree wave B has ended and major correction in larger degree wave C has commended for headway to 147.00 and possibly test of psychological resistance at 150.00.