EUR/JPY – 132.52
Original strategy:
Sold at 132.40, Target: 130.70, Stop: 133.00
Position: – Short at 132.40
Target: – 130.70
Stop: – 133.00
New strategy :
Hold short entered at 132.40, Target: 130.70, Stop: 133.00
Position: – Short at 132.40
Target: – 130.70
Stop:- 133.00
Although the single currency edged higher, as euro has rerouted after faltering below 133.00 level, retaining our bearishness and consolidation with downside bias remains for another fall to 131.85-90, however, break of support at 131.75 is needed to signal top has been formed at 134.41 earlier and extend the fall from there for retracement of recent rise to 131.00-05, break there would bring further decline towards support at 130.62 which is likely to hold on first testing.
In view of this, we are holding on to our short position entered at 132.40. Above 133.00 would risk test of indicated resistance at 133.12 but break there is needed to retain near term bullishness and extend the rebound from 131.75 to previous support at 133.43, however, upside should be limited to 134.00 and price should falter well below said resistance at 134.41, bring further consolidation.
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).
