GBP/JPY – 148.55
New strategy :
Stand aside
Position: –
Target: –
Stop:-
As sterling found good support at 147.30 and rebounded late last week, suggesting further consolidation above 146.95 support would be seen and upside risk remains for the rebound from 146.95 to bring retracement of the fall from 152.85 to 149.90-00 and possibly test of resistance at 150.25 but still reckon upside would be limited to 150.90-00 and bring another decline next week.
On the downside, expect pullback to be limited to 148.00 and bring another rebound. Below 147.95-00 would suggest top is possibly formed, bring weakness towards said support at 147.30 but break there is needed to revive bearishness and bring retest of 146.95. Looking ahead, once this level is penetrated, this would confirm the fall from 152.85 top has resumed 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.
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.
