FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - January 27, 2011

The GBP/JPY is moving within medium term downtrend but current wave up is corrective - colored red. The targets of the correction are Fibonacci retracements of 132.32-129.49 and possible expansions off 129.49-131.06-130.55.

Resistances:

- 131.24 = .618 retracement
- 131.52 = contracted objective point (COP)
- 132.12 = objective point (OP)

If the downtrend continues the nearest supports will be 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

Overbought/Oversold

Assuming that the medium term trend is 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 at the zero level, and the retracement is not deep enough to go short, therefore stand aside until the price hits 131.24 or 131.52 (.618 and COP).

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