FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, November 25, 2010

GBP/JPY is developing medium term downtrend. As of now it consists of four waves with corrective wave 4 developing - colored red in the chart. The targets of the corrective upmove are Fibonacci retracements of 134.17-130.83 (wave 3), 133.36-130.83 (subwave C within wave 3).

Resistances:

- 131.80 = .382 retracement, reached already (!)
- 132.10-11 = confluence area of .50 ret and .382 ret
- 132.39-50 = confluence area of .618 ret and .50 ret
- 132.89 = .618 ret

If the medium trend continues the nearest supports will be Fibonacci retracements of 126.43-134.19, and expansions off 134.17-130.83-131.98.

Supports:

- 130.31 = .50 retracement
- 129.92 = contracted objective point (COP)
- 129.39 = .618 ret

Overbought/Oversold

The Detrended Oscillator is flattening around the zero level confirming the corrective wave. Assuming that the prevailing trend is down it's preferable to seek for topping signals to go short when the price hits a Fib resistance or gets into the oversold - 25 pips to go (which corresponds to 131.80 retracement).

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