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

GBP/JPY is now developing wave C of the medium term uptrend - colored magenta in the chart. Wave C was confirmed when the price broke above 131.74. At this moment there are 3 subwaves within this wave C - A-B-C colored red in the chart, and subwave C is still developing. The targets above the current price level are Fibonacci expansions off 129.33-131.74-129.43, 129.43-130.64-129.51, 129.51-131.94-131.32, 131.32-132.99-132.38.

Resistances:

- 133.33-41 = confluence area of expanded objective point (XOP) and contracted objective point (COP)
- 133.75 = objective point (OP)

If the price reverses down and breaks below 132.38 the nearest supports will be Fibonacci retracements of 129.51-132.99.

Supports:

- 131.66 = .382 retracement
- 131.25 = .50 ret
- 130.84 = .618 ret

Overbought/Oversold

Assuming that the prevailing trend is going up it's preferable to use the Detrended Oscillator's oversold readings and in conjunction with Fib supports. Oversold area is 30 pips down which does not correspond to a Fib support, so stand aside in the meantime.

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