GBP/JPY – 147.75
Original strategy:
Sold at 151.00, met target at 149.00
Position: – Short at 151.00
Target: – 149.00
Stop: –
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Sterling dropped in line with our bearish expectation and our short position entered at 151.00 met downside target at 149.00 with 200 points profit, this anticipated decline adds credence to our view that top has been formed at 152.85, however, as price has recovered from 146.95, minor consolidation above this level would be seen and corrective bounce to 148.10-20 cannot be ruled out, having said that, reckon upside would be limited to 148.60-70 and 148.95-00 should hold, bring another decline later.
In view of this, would not chase this fall here and would be prudent to sell sterling again on subsequent recovery as 149.00 should limit upside. Below said support at 146.95 would signal the decline from 152.85 top is still in progress, then further fall to 146.60-65 and possibly 146.00 would follow but previous support at 145.25 would remain intact due to loss of downward momentum.
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.
