FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - March 7, 2011

The GBP/JPY is developing corrective wave B against 131.14-135.19 - colored magenta in the chart. Within this wave there are A-B-C waves of smaller degree - colored yellow in the chart. Subwave C is still developing. The targets of the downmove are Fibonacci retracements of 131.14-135.19, and expansions off 135.19-133.63-134.09.

Supports:

- 133.16-13 = confluence area of .50 retracement and contracted objective point (COP)
- 132.69 = .618 ret
- 132.53 = objective point (OP)
- 131.57 = expanded objective point (xOP)

If the price reverses the immediate resistances will be Fibonacci retracements of the wave down from 135.19 - this wave is not developed yet.

Overbought/Oversold

Assuming that medium term trend is down it's preferable to use overbought condition of the Detrended Oscillator (current prices plus 25-40 pips) or its cross above the zero level (current prices) to consider short positions.

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