FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, November 9, 2010

This currency pair has developed wave 3 (127.96-131.99) of the midterm uptrend - colored magenta in the chart. The downwave which is developing now is corrective wave 4 and its targets are Fibonacci retracements of 128.87-131.99, 127.96-131.99 (wave 3), 126.43-131.99, and expansions off 131.99-130.52-131.17.

Supports:

- 130.26 = contracted objective point (COP)
- 130.06 = .618 retracement
- 129.97-87 = confluence area of .50 and .382 retracements
- 129.70 = objective point (OP)
- 129.50 = .618 ret
- 129.21 = .50 ret
- 128.79 = expanded objective point (XOP)
- 128.55 = .618 ret

In case the price reverses up to continue the med term trend the nearest resistances will be Fibonacci retracements of the downwave starting from 131.99 - wave not developed yet.

Overbought/Oversold

The Detrended Oscillator is firmly established below the zero level, confirming the corrective wave of a larger degree. So far short-term short positions are favored. However, assuming that the prevailing trend is still up one should be extra cautious when the price hits a Fibonacci support since that may be the start of a new leg up.

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