FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for August 23, 2011

GBP/JPY is developing impulse subwave РЎ (colored magenta in the chart) that is part of wave B of longer term downtrend (colored royal blue in the chart). The targets of the upmove are Fibonacci retracements of 130.81-123.27, and expansions off 123.27-126.95-125.66, 125.66-127.31-126.15.

Resistances:

- 127.17 = contracted objective point (COP)
- 127.80 = objective point (OP)
- 127.93 = confluence area of COP and .618 retracement

If the price reverses to the downside the immediate supports will be Fibonacci retracements of 123.27-127.31.

Supports:

- 125.77 = .382 ret
- 125.29 = .50 ret
- 124.81 = .618 ret

Overbought/Oversold

Assuming that the major wave is up it's preferable to try long positions when the Detrended Oscillator gets below the zero level (5-15 pips below the current prices) or into the oversold area (30-45 pips below the current prices).

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