EUR/JPY – 118.90
Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79
Trend: Near term down
Original strategy:
Sell at 120.40, Target: 118.40, Stop: 121.00
Position: –
Target: –
Stop: –
New strategy :
Sell at 120.40, Target: 118.40, Stop: 121.00
Position: –
Target: –
Stop:-
Although the single currency has remained under pressure and the decline from 122.89 top may extend further weakness to 118.50, loss of near term downward momentum should prevent sharp fall below indicated previous chart support at 118.25 and reckon 117.90-00 would hold on first testing, price should stay well above 117.40-50, risk has increased for a corrective rebound to take place soon.
In view of this, would not chase this fall here and would be prudent to sell euro on subsequent rebound as resistance at 120.44 should cap upside and bring another decline. Above 1121.00 would abort and suggest low is possibly formed, risk rebound to 121.50 but resistance at 121.84 should hold from here, bring another decline later.
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).
