FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - February 28, 2011

The GBP/JPY is now moving within wave 5 of medium term downtrend - colored red in the chart. The targets below the current price are Fibonacci expansions off 135.56-133.31-134.62 (waves 1-2), 134.62-131.49-132.48 (waves 3-4).

Supports:

- 130.98 = expanded objective point (XOP)
- 130.55 = contracted objective point (COP)
- 129.35 = objective point (OP)

If the price reverses up it's immediate resistances will be Fibonacci retracements of 132.48-131.14, 134.62-131.14, 135.56-131.14.

Resistances:

- 131.81 = .50 retracement
- 131.97 = .618 ret
- 132.47 = .382 ret
- 132.83-88 = confluence area of .382 and .50 retracements
- etc.

Overbought/Oversold

Assuming the trend is down it's preferable to use overbought condition of the Detrended Oscillator (current prices + 10-15 pips) to consider short positions, especially when the price hits a Fib resistance.

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