FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, August 24, 2010

Wave count on hourly TF shows that this currency pair is developing a strong med term downtrend. All the waves and subwaves are impulses. The targets of the downside movement are Fibonacci expansions off AB waves of all the degrees: 137.75-132.78-134.80 (dailies - colored royal blue), 134.80-132.43-134.03 (hourly - colored magenta), and smaller degrees 134.03-131.96-133.31, 133.29-132.00-132.56:

- 130.47 = expanded objective point (XOP)
- 130.20 = XOP
- 129.96 = XOP
- 129.83 = objective point (OP)
- 129.18 = super expanded objective point (SXOP)

In case the price reverses and goes up the nearest resistances will be Fibonacci retracements of the wave down starting from 133.31.

Overbought/Oversold

The Detrended Oscillator is in the oversold area. Assuming that the prevailing trend is down, it's better to seek for entries when the price retraces. However the oversold is 70 pips above. That means that for the time being it is recommended to stand aside until the price retraces.