FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, October 18, 2010

This currency pair is still developing daily wave C - colored royal blue in the chart. Within this wave there's potential wave C that is still developing. To confirm this subwave break below 128.97 is needed.

In case 128.97 is broken to the downside the nearest targets below the current level will be Fibonacci expansions off 135.03-130.78-132.93 (daily waves A-B), 132.93-128.97-130.69 (subwaves within daily C).

Supports:

- 128.68 = objective point (OP)
- 128.24 = contracted objective point (COP)
- 126.73 = OP

In case the price reverses to the upside for a corrective wave the nearest resistances will be Fibonacci retracements of the wave down from 130.69 - wave not developed yet.

Overbought/Oversold

The Detrended Oscillator is clearly in the oversold, confirming the downwave of a larget degree. Assuming that the prevailing trend is down it's preferable to seek for topping signals - when the price hits a Fibonacci resistance or gets into the overbought - to enter short.

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