Elliott Wave Daily

Trade Idea: GBP/JPY - Hold long entered at 149.50

Typography

GBP/JPY - 149.85


Original strategy:

Bought at 149.50, Target: 151.50, Stop: 148.90

Position: - Long at 149.50
Target: - 151.50
Stop: - 148.90


New strategy :

Hold long entered at 149.50, Target: 151.50, Stop: 148.90

Position: - Long at 149.50
Target:  - 151.50
Stop:- 148.90

Although sterling has retreated after meeting resistance at 150.50 yesterday and consolidation below this level would be seen, reckon pullback would be limited to previous resistance at 149.40 and bring another rise later, above said resistance would extend the erratic rise from 146.95 for a retracement of the fall from 152.85 to 150.50-55 and possibly 151.00 but still reckon upside would be limited to resistance at 151.60, bring retreat later. 

In view of this, we are holding on to our long position entered at 149.50. Below 148.90-00 would defer and risk weakness to 148.55-60, break there would signal top is formed instead, then weakness to indicated support at 147.80 would follow. Once this level is penetrated, this would signal the rebound from 146.95 has ended, bring weakness to another previous support at 147.30, below would confirm the fall from 152.85 has resumed for retest of 146.95. Looking ahead, below there would extend the fall from 152.85 top for retracement of recent upmove to 146.60-65 and then 146.00 but 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.