Trade Idea: EUR/JPY - Hold long entered at 123.80

EUR/JPY - 124.88

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

Original strategy:

Bought art 123.80, Target: 125.30, Stop: 123.60

Position: - Long at 123.80
Target: - 125.30
Stop: - 123.60

New strategy :

Hold long entered at 123.80, Target: 125.30, Stop: 124.00

Position: - Long at 123.80
Target:  - 125.30
Stop:- 124.00

As the single currency has surged again after finding renewed buying interest at 123.66 last week and just broke above indicated resistance at 124.65, adding credence to our bullishness for the rise from 122.40 to extend further gain to indicated resistance at 125.31 but break of this level is needed to confirm correction from 125.82 has ended at 122.40, bring subsequent rise towards this recent high which is likely to hold on first testing.

In view of this, we are holding on to our long position entered at 123.80. Only below support at 123.66 would risk weakness to 123.20-25, break there would defer and suggest first leg of rebound from 122.40 has ended instead, risk further weakness to 122.90-00 but price should stay well above said support at 122.40, bring another rebound 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).