USD/JPY – 79.83
USD/JPY – Wave (1) of 3 ended at 84.82 and wave (2) possibly ended at 94.99
Although the greenback has fallen again after meeting renewed selling interest at 80.61 last week and marginal weakness from here cannot be ruled out, as this move from 84.19 still looks corrective, downside should be limited to 79.55 and bring another rise later. Above 80.61 would be the first sign that low is formed and bring a stronger rebound to 81.78, break there would suggest low is formed and further gain to 82.45-50 but only break of resistance at 83.31-39 would signal the correction from 84.19 has ended and bring retest of this level eventually.
Our preferred count is that, wave 1 ended at 87.10 followed by a 3-legged wave 2 at 101.45 and the wave 3 is unfolding with wave (1) of 3 sub-divided into i: 91.73, ii: 97.79, iii: 88.01, then wave iv at 92.33, therefore, the wave v of (1) has ended at 84.82 and wave (2) is labeled as A leg: 93.78), B leg of wave (2) ended at 88.14 and C leg has ended at 94.99.
Under this count, wave (3) of 3 is under way with i ended at 88.15, followed by wave ii at 93.65 and wave iii has formed a low at 80.21. The wave iv is a triangle which ended at 85.53 and wave v has either formed a low at 75.31, the breach of 80.25 resistance adds credence to this view and further gain to 84.50 and later towards 85.00 would be seen but reckon resistance at 85.53 (previous 4th) would remain intact.
On the downside, below previous resistance at 79.55 would shift risk to downside for a deeper correction of recent upmove to 79.15 (61.8% Fibonacci retracement of 76.03-84.19), however, reckon downside would be limited to 78.50-60 and previous resistance at 78.25-30 would hold, bring another rise later.
Recommendation: Hold long entered at 80.10 for 82.00 with stop below 79.10
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 is taking place with wave 1 ended at 87.10 earlier this year in January and wave 2 ended at 101.45 and as suggested previously that wave 3 is unfolding and already reached our indicated initial downside target at 79.75 to a fresh record low at 75.94. The quick rebound from there suggest a minor wave iii has possibly ended and correction back to 85.53 would be seen.
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