FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for July 14, 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 and B), orange red (A and B as well).

Now the resistances are Fibonacci retracements of 130.09-124.87, 130.82-124.87.

Resistances:

- 127.85 = .50 ret
- 128.10 = .618 ret
- 128.55 = .618 ret

If the price keeps going down, the immediate supports will be Fibonacci retracements of 124.87-127.83 and expansions off 139.93-130.26-135.11, 135.11-129.74-132.30, 132.30-128.19-130.82, 130.82-124.87-127.83.

Supports:

- 126.70 = .382 ret
- 126.35 = .50 ret
- 126.00 = .618 re

- 124.17-14 = confluence area of expanded objective point (XOP) and contracted objective point (COP)
- 123.61 = XOP

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 (25-30 pips above the current prices) or into the overbought area (50-60 pips above the current prices).

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