Trade Idea: EUR/JPY - Hold short entered at 129.50

EUR/JPY - 128.95

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:

Sold at 129.50, Target: 127.50, Stop: 130.10

Position: - Short at 129.50
Target: - 127.50
Stop: - 130.10

New strategy :

Hold short entered at 129.50, Target: 127.50, Stop: 129.50

Position: - Short at 129.50
Target:  - 127.50
Stop:- 129.50

Although the single currency rebounded after falling to 128.43 yesterday, reckon upside would be limited and bring another decline later, below said support at 128.43 would extend the fall from 131.40 top for retracement of early upmove to 128.00, then towards previous support at 127.44, however, near term oversold condition should limit downside to 127.00. 

In view of this, we are holding on to our short position entered at 129.50. Only break of indicated previous support at 130.09 would abort and suggest low is formed instead, bring a stronger rebound to 130.50-60 but price should falter below resistance at 131.12 and 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).