FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, November 30, 2010

GBP/JPY is developing subwave C (colored orange red in the chart) within wave 5 (colored red) of the medium term downtrend. However the whole midterm trend from 134.19 may become a corrective wave to 126.43-134.19. The targets of the downmove are Fibonacci retracements of 126.43-134.19, and expansions off 134.17-130.83-132.10, and 132.10-130.81-131.35.

Supports:

- 130.55 = contracted objective point (COP)
- 130.31 = .50 retracement
- 130.06-04 = confluence area of objective point (OP) and COP
- 129.39-26 = confluence area of .618 ret and expanded objective point (XOP)
- 128.76 = OP

If the price reverses up and breaks above 131.35 the nearest resistances will be Fibonacci retracements of the wave down from 134.19 - this wave is not developed yet.

Overbought/Oversold

The Detrended Oscillator is residing in the oversold area which confirms the downtrend. Assuming that the trend is still down it's preferable to open shorts on recovery, the zero level or overbought (20-35 pips to go) may be good areas to consider.

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