FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, August 4, 2010

According to wave count on larger timeframes this currency pair is developing wave C ov weekly degree (colored silver). Therefore the strategic targets of the upside movement are Fibonacci expansions off 130.40-136.00-130.80:

- 136.40 = objective point (OP), reached already
- 139.86 = expanded objective point (XOP)

On hourly charts we also have a set of three waves and wave C developing. Its targets are Fibonacci expansions points off 130.80-137.53-134.18:

- 138.34 = contracted objective point (COP)
- 140.91 = OP

At the current moment the intermediate trend is turning to a corrective wave. Its targets are Fibonacci retracement points of 134.18-137.75 and 130.80-137.75, and expansions off 137.75-136.30-137.08:

- 135.97 = .50 retracement, reached already
- 135.63 = OP
- 135.54 = .618 ret
- 135.10 = .382 ret
- 134.73 = XOP

Overbought/Oversold

The Detrended Oscillator is clearly in the oversold area and has exceeded the previous peak, which indicates a downside wave of a smaller degree. Assuming that the major trend is up, its better to wait for indications of a wave up to resume riding the prevailing uptrend. However very short-term "sells" are also possible.