FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, August 23, 2010

According to wave count on hourly chart this currency pair is now moving in a clear downtrend, where all the waves and subwaves are impulses - C's. The targets of the donwside movementa are mostly Fibonacci expansions - off 137,75-132,78-134,80, 134,80-132,43-134,03, 134,03.

Price targets below the current level:

- 131,73-66 = confluence area of contracted objective point (COP) and objective point (OP)
- 130,20 = expanded objective point (XOP)
- 129,83 = OP

In case the price continues moving upwards, the nearest resistances will be Fibonacce retracements of 134,80-131,96 and 134,03-131,96:

- 133,24 = .382 retracement
- 133,38 = .50 retracement
- 133,72 = .618 retracement

Overbought/Oversold

The Detrended Oscillator is slightly above the zero. The nearest overbought area is some 35-45 pips above the curren price, oversold - 45-60 pips below. Assuming that the prevailing trend is down, it's good to go short in case of topping signals in the vicinity of the overbought area of Fibonacci resistances listed above.