FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - March 3, 2011

The GBP/JPY is moving in correction to 135.56-131.14 (wave A of medium term downtrend - colored magenta in the chart). This wave is composed of A-B-C waves of smaller degree - colored red in the chart, and potential subwave C is still developing.

The targets of the upmove are Fibonacci expansions off 129.75-135.56-131.14, 131.14-134.04-132.73, 132.73-133.65-133.00.

Resistances:

- 133.92 = objective point (OP)
- 134.49-52 = confluence area of expanded objective point (XOP) and contracted objective point (COP)
- 134.73 = COP

If the decline resumes the immediate supports will be Fibonacci retracements of 131.14-134.04 and expansions off 135.56-131.14-134.04.

Supports:

- 132.59 = .50 retracement
- 132.25 = .618 ret
- 131.31 = COP

Overbought/Oversold

Assuming that medium term trend is up it's preferable to use oversold condition of the Detrended Oscillator (current prices minus 25-35 pips) or its cross below the zero level (5-10 pips) to consider long positions.

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