FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, September 20, 2010

According to wave count this currency pair has just developed impulsive wave A of the med term uptrend (colored magenta on the chart). The current wave down is supposed to be corrective, its targets are Fibonacci retracements of 127.62-135.03.

Supports:

- 132.20 = .382 retracement
- 131.32 = .50 ret
- 130.45 = .618 ret

This corrective wave will be over in case 135.03 is breached to the upside, since this level is the top of wave A. Wave A will be cancelled in case 127.62 is breached to the downside, since this is the base of wave A.

In case the current wave B is over and the price continues its uptrend the nearest resistance is going to be Fibonacci expansion off 127.62-134.01-132.93.

Resistance:

- 136.88 = contracted objective point (COP)

Overbought/Oversold

The Detrended Oscillator is oscillating around the zero level. Assuming that the prevailing trend is up, it's advisable to look for bottoming signals when the price reaches a Fib support (see listed above) or gets into the oversold - 35-45 pips below the current price according to the oscillator.