EUR/JPY – 132.75
Original strategy:
Bought at 132.95, Target: 134.95, Stop: 132.35
Position: – Long at 132.95
Target: – 134.95
Stop: – 132.35
New strategy :
Hold long entered at 132.95, Target: 134.95, Stop: 132.35
Position: – Long at 132.95
Target: – 134.95
Stop:- 132.35
Although the single currency has continued trading lower after retreating from 133.89 (this week’s high), suggesting further consolidation below this level would be seen, however, still reckon downside would be limited to previous resistance at 132.60 and bring rebound later, above 133.45-50 would suggest the retreat from 133.89 has ended, bring retest of this level. Break there would extend the rise from 131.40 low towards previous resistance at 134.50 but break there is needed to retain bullishness and extend recent upmove towards 135.00, then 135.50.
In view of this, we are holding on to our long position entered at 132.95. A firm break below previous resistance at 132.60 would abort and suggest top has been formed at 133.89 instead, bring weakness to 132.20-25 but support at 131.93 should limit downside, price should stay well above said support at 131.40.
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).
