FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for August 17, 2011

GBP/JPY is developing corrective wave B of medium term downtrend from 123.27 (colored magenta in the chart). Within this wave there are five subwaves (colored orange red in the chart) with subwave 5 still developing from 125.27.

The targets of the upmove are Fibonacci retracements of 130.81-123.27, 128.87-123.27, and expansions off 123.27-124.96-123.95, 123.95-125.99-125.27.

Resistances:

- 126.53 = contracted objective point (COP)
- 126.68-73 = confluence area of expanded objective point (XOP) and .618 retracement
- 127.04 = .50 ret
- 127.31 = objective point (OP)
- 127.93 = .618 ret

If the price reverses to the downside the targets of the downmove will be Fibonacci retracements of 123.27-126.42.

Supports:

- 125.22 = .382 ret
- 124.85 = .50 ret
- 124.47 = .618 ret

Overbought/Oversold

Assuming that the major trend is now down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (10-15 pips above the current prices) or into the overbought area (45-65 pips above the current prices).

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