EUR/JPY – 134.29
Original strategy:
Buy at 132.40, Target: 134.40, Stop: 131.80
Position: –
Target: –
Stop: –
New strategy :
Sell at 133.90, Target: 132.30, Stop: 134.50
Position: –
Target: –
Stop:-
As the single currency met resistance at 134.24 earlier today and has slipped again since, suggesting a temporary top has been formed at 134.41 last week, hence consolidation below this level would be seen with mild downside bias for weakness to 132.95-00, break there would add credence to this view, bring retracement of recent upmove to 132.50, then 132.25-30 but reckon previous resistance at 132.01 would turn into support and contain euro’s downside.
In view of this, we are looking to sell euro on recovery as 133.90-00 should limit upside. Only break of said intra-day resistance at 134.24 would abort and signal the retreat from 134.41 has ended, bring retest of this level, break there would extend recent upmove to 135.00-10, however, overbought condition should limit upside and reckon 135.55-60 would hold from here, price should falter below 136.00-10, risk from there is seen for a retreat to take place later.
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).
