EUR/JPY – 120.05
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term up
New strategy :
Stand aside
Position: –
Target: –
Stop:-
As the single currency has remained under pressure after meeting renewed selling interest at 121.84 earlier this week, adding credence to our view that recent rise from 118.24 has ended at 122.89 last week, hence downside risk remains for this fall from 122,89 top to extend further weakness to 119.65-70 and then 119.35-40, however, near term oversold condition should limit downside to 119.00 and support at 118.67 should hold from here,
In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. On the upside, whilst recovery to 120.60-70 cannot be ruled out, reckon upside would be limited to 121.15-20 and bring another decline later. Only break of said resistance at 121.84 would revive bullishness and suggest low is formed instead, bring test of indicated resistance at 122.26 first.
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).
