EUR/JPY – 133.17
Original strategy:
Sold at 132.40, stopped at 133.00
Position: – Short at 132.40
Target: –
Stop: – 133.00
New strategy :
Stand aside
Position: –
Target: –
Stop:-
The single currency has surged again today after finding renewed buying interest at 132.45 yesterday, dampening our bearishness and upside risk remains for the rebound from 131.75 to extend gain to 133.50-60, however, break of 134.00 is needed to signal correction from 134.41 has ended at 131.75, bring retest of this recent high. Once this level is penetrated, this would confirm recent uptrend has resumed and extend headway to 135.00-10 and later 135.50-60.
In view of this, would not chase this move here and would be prudent to stand aside in the meantime. Below said support at 132.45 would suggest top is possibly formed and revive near term bearishness for weakness to 132.00, then test of previous support at 131.75 which is likely to hold from here.
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).
