FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - January 26, 2011

The GBP/JPY has developed wave 125.47-132.48 - wave B according to wave count - colored light green in the chart, and is now moving within potential wave C, to confirm break below 125.47 is needed, until then the targets below are Fibonacci retracements of 125.47-132.48, expansions off 134.19-125.47-132.48, 132.48-130.65-132.32.

Supports:

- 129.80 = .382 retracement, already hit (!)
- 129.36 = expanded objective point (XOP)
- 128.97 = .50 ret

If the price reverses up the nearest resistances will be Fibonacci retracements of 132.32-129.60.

Resistances:

- 130.64 = .382 ret
- 130.96 = .50 ret
- 131.28 = .618 ret

Overbought/Oversold

Assuming that the medium term trend has turned down it's preferable to use overbought readings of the Detrended Oscillator or its cross above the zero to consider short positions. Now the oscillator is above the zero, but the retracement is not deep enought to go short, therefore stand aside until the price hits 130.64 resistance (.382 retracement).

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