GBP/JPY – 148.20
New strategy :
Stand aside
Position: –
Target: –
Stop:-
Despite last week’s anticipated decline, sterling found good support at 146.95 and has rebounded, suggesting consolidation above this level would be seen and recovery to 148.55-60, then 149.00 cannot be ruled out, however, price should falter well below resistance at 149.90 and bring another decline later. A break below said support at 146.95 would signal the fall from 152.85 top is still in progress for retracement of recent upmove to 146.60-65 and then 146.00, having said that, loss of momentum should limit downside and previous support at 145.25 should remain intact.
On the upside, whilst recovery to 149.00 cannot be ruled out, indicated resistance at 149.90 should cap upside and bring another decline. A firm break above this level would signal the fall from 152.85 has ended instead, risk test of 150.25 resistance but still reckon upside would be limited to 150.90-95 and price should falter well below resistance at 151.60.
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.
