FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, October 11, 2010

Pound/yen is still developing wave C of the daily downtrend - colored royal blue in the chart. The strategic targets of wave C are Fibonacci expansions off waves A-B - 135.03-130.78-132.93. Minor targets are Fibonacci expansions off subwaves A-B within daily C - colored magenta in the chart - 132.93-129.98-131.06.

Supports:

- 129.24 = contracted objective point (COP)
- 128.68 = objective point (OP)
- 128.11 = OP

In case the price keeps its advance within corrective wave the nearest resistances will be Fibonacci retracements of 132.93-129.87.

Resistances:

- 131.04 = .382 retracement
- 131.40 = .50 ret
- 131.76 = .618 ret

Overbought/Oversold

The Detrended Oscillator is oscillating around the zero level confirming the correction. Assuming that the prevailing trend is down it's preferable to seek for topping signals to enter short when the price hits a Fibonacci resistance or gets into the overbought - some 15-25 pips to go.

Read more on how to apply Fibonacci studies to calculate price targets.