FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for July 12, 2011

GBP/JPY broke below 128.19 and thus confirmed wave C of medium term downtrend (colored royal blue in the chart). This wave however is part of impulse wave C of long term downtrend (from 132.30) - this one is light green in the chart. Within the "royal blue" wave there are waves of still smaller degrees - magenta (A), red (A, B and C), and still smaller orange red (A, B and C) and yellow (5 waves).

The immediate supports are Fibonacci expansions off 139.93-130.26-135.11, 135.11-129.74-132.30, 132.30-128.19-130.82, 130.82-128.95-130.09, 130.03-128.89-129.53, 129.53-127.41-127.84.

Supports:

- 127.06 = expanded objective point (XOP)
- 126.93 = objective point (OP)
- 126.71 = OP
- 126.55-53 = confluence area of super expanded objective point (SXOP) and contracted objective point (COP)
- 125.72 = OP

If the price reverses to the upside the immediate resistances will be Fibonacci retracements of the wave down from 130.82 - this wave is not developed yet.

Overbought/Oversold

Assuming that the medium term trend is down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (20-25 pips above the current prices) or into the overbought area (35-45 pips above the current prices).

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