FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, December 2, 2010

GBP/JPY has developed wave A of medium term downtrend 134.19-129.33 (colored magenta in the chart). Current upmove consists of 4 subwaves (colored orange red) with subwave 4 still developing. The targets of the corrective rise are Fibonacci retracements of 129.33-134.19 and expansions off 129.33-130.47-129.90.

Resistances:

- 131.74-76 = confluence area of expanded objective point (XOP) and .50 retracement
- 132.33 = .618 ret
- 132.88 = super expanded objective point (SXOP)

If the price declines the nearest supports will be Fibonacci retracements of 129.90-131.60, 129.33-131.60, and expansions off 134.19-129.33-131.60.

Supports:

- 130.95 = .382 ret
- 130.75-73 = confluence area of .50 and .382 retracements
- 130.55-47 = confluence area of .618 and .50 retracements
- 130.20 = .618 ret
- 128.60 = contracted objective point (COP)

Overbought/Oversold

The Detrended Oscillator is below the zero level however this condition can hardly be used to go long since the major trend is down. It's preferable to seek for shorting opportunities on subsequent rise to a Fib resistance or into the overbought area - 30-40 pips to go.

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