FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for May 18, 2011

GBP/JPY is developing corrective subwave B (colored red in the chart), that is part of another corrective wave 4 (colored royal blue in the chart).

The targets of the downmove are Fibonacci retracements of 130.26-133.16, 130.50-133.16, and expansions off 133.16-131.65-132.55. More significant targets are Fibonacci retracements of 122.49-139.93, and expansions off 139.93-132.90-137.03.

Supports:

- 131.62 = contracted objective point (COP)
- 131.52 = .618 ret
- 131.37 = .618 ret
- 131.04 = objective point (OP)
- 130.11 = expanded objective point (XOP)
- 130.00 = OP
- 129.15 = .618 ret

If the price reverses up the immediate resistances will be Fibonacci retracements of 137.03-130.26, and expansions off 130.26-133.16-131.65.

Resistances:

- 133.44 = COP
- 133.64 = .50 ret
- 134.44 = .618 ret
- 134.55 = OP

Overbought/Oversold

Assuming that the medium term trend is down but a corrective wave is developing it's preferable to stand aside or try longs when the Detrended Oscillator gets below the zero level (current prices) or into the overbought area (current prices as well).

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