FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, September 6, 2010

According to wave count this currency pair is now developing potential wave C of daily degree (colored light green on the chart). The strategic targets of the downside movement are Fibonacci expansions off 137.75-128.77-133.59. Wave C is confirmed on 128.64 break, cancelled - 133.59. It may be cancelled even sooner in case a wave of the same degree develops.

The currend med term uptrend is considered a corrective movement. The targets of the upside movement are Fibonacci retracements of 133.59-128.64 and expansions off 128.64-130.91-129.15.

Resistances:

- 131.70 = .618 retracement, the price reversed within 5 pips
- 132.82 = expanded objective point (XOP)

In case the price resumes its downside movement, the targets are retracements of 128.64-131.65:

- 129.79 = .618 ret
- 128.04 = contracted objective point (COP)

Overbought/Oversold

The Detrended Oscillator is moving into the oversold area. Assuming that the prevailing (daily) trend is down and the movement up is corrective, now it may be a good moment to look for short entries.