EUR/JPY – 102.98
Recent wave: wave (i) of 3 ended at 105.44 and wave (ii) has ended at 123.33
Trend: Down
New strategy :
Sell at 104.50, Target: 102.50, Stop: 105.15
Position: –
Target: –
Stop:-
Despite intra-day resumption of recent decline to 101.95 (lowest since 2001), the subsequent quick rebound from there suggests a minor low is formed and retracement to intra-day high of 103.80 cannot be ruled out, however, upside should be limited to 104.45-50 (50% Fibonacci retracement of 107.00 – 101.95) and bring another decline later. A break of said support would extend recent downtrend to 101.41 (50% projection of 107.00-102.22 measuring from 103.80), however, reckon downside would be limited to 100.85 (61.8% projection).
Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with diagonal (1) ended at 108.01, followed by wave (2) at 111.93 and wave (3) is unfolding for weakness to 101.00 but psychological support at 100.00 should remain intact.
On the downside, indicated downside target at 101.98 (1.618 times projection of 114.16-108.01 measuring from 111.93) has already been met and further subsequent weakness to 100.85 would be seen. In view of this, would be prudent to wait for such recovery and sell at a higher level. Only above 105.07 (61.8% Fibonacci retracement of 107.00 to 101.95) would signal a temporary low is formed and risk test of resistance at 105.40.
Our preferred count is that the decline from 139.26 is wave C and is sub-divided into (a): 127.00, (b) 138.49 and wave (c) has commenced from there with a diagonal wave 1 (i: 126.95, ii: 134.37, iii: 120.70, iv: 125.24 and then wave v at 119.66). The rebound from 119.66 to 127.95 was an a-b-c wave 2 and wave 3 is taking place from 127.95 with minor wave (i) ended at 105.44. The wave (ii) correction commenced from 105.44 and has ended a 123.33 as a complex correction ABC-X-ABC, so wave (iii) should extend towards psychological support at 100.00.
On the bigger picture, we are treating the rally to 169.97 as end of wave A, then selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has commended from there with minor wave 1 ended at 119.66 and wave 2 at 127.95. This wave (C) of B should be limited to psychological support at 100.00 and reckon 95.00 would remain intact.