USD/JPY – 110.80
USD/JPY – Wave V of larger degree circle V has possibly ended at 75.31 and major correction has commenced and already met indicated target at 125.00.
The greenback did extend recent fall from 114.50 (our short position entered at 112.00 met target at 110.00 with 200 points profit), however, as dollar found good support at 109.85 late last week and has staged a strong rebound in part due to NFP, suggesting a temporary low is possibly formed there and 1-2 weeks of consolidation above this level would be seen, hence initial recovery to 111.20-30 cannot be ruled out, however, reckon upside would be limited to 111.70-75 and resistance at 112.20 should hold, bring another decline later this month. A drop below said support at 109.85 would signal the selloff from 114.50 top is still in progress and may extend weakness to 109.30-40 but reckon previous support at 108.82 would hold from here, price should stay well above this year’s low at 108.13, bring rebound later.
Our preferred count is that, triangle wave IV (with circle) ended at 101.45 and the circle wave V brought dollar down to the record low of 75.31 in 2011 and the subsequent rebound signal major correction has commenced with A leg ended at 84.19, followed by wave B at 77.14 and impulsive wave C is now unfolding (indicated upside target at 125.00 had been met) for gain towards 127.00 level. In the event dollar drops below support at 99.01, this would confirm medium term decline from 125.86 top (2015 high) has resumed for subsequent weakness to 98.00 and possibly 97.00.
Under this count, this wave C is unfolding as impulsive waves with (1) (2), 1 2 ended at 80.67, 79.07, 82.84 and 81.69 respectively, hence the extended wave 3 has ended at 103.74 and wave 4 correction of recent upmove should bring weakness to 92.57, then towards 90.88 but psychological support at 90.00 should limit downside and bring another rally later in wave 5, indicated target at 125.00 had been met and gain to 127.00 cannot be ruled out but reckon price would falter below 130.00.
On the upside, whilst initial recovery to 111.20-30 cannot be ruled out, reckon upside would be limited to resistance at 111.71 and 112.20 should hold, bring another decline. A daily close above said resistance at 112.20 would defer and signal the first leg of decline from 114.50 has ended instead, bring a strong rebound to 112.85-90 but resistance at 113.58 should cap upside, bring another selloff later.
Recommendation: Short entered at 112.00 met target at 110.00 with 200 points profit and would sell again at 112.00 for 110.00 with stop above 113.00.
On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle commenced from there and hit a record low of 75.31, however, the subsequent strong rebound signals this circle wave V has possibly ended there, hence gain to (indicated upside target at 122.00 and 125.00 had been met), the retreat from 125.86 suggests wave A of major correction has ended there and wave B correction back to 99.00, then 95.00 would be seen, however, reckon downside would be limited to 90.00, bring another rebound in wave C next year.
