FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for November 7, 2011

GBP/JPY is developing impulse wave C (colored light green in the chart) of medium term uptrend from 116.91. Within this wave there are four subwaves (colored royal blue in the chart), and corrective subwave 4 is still developing from 127.25. Within the latter wave there are two waves (colored red in the chart) with subwave B developing from 123.85. The targets of the upmove are Fibonacci retracements of 127.25-123.85, and expansions off 123.85-125.25-124.55.

Resistances:

- 125.95 = confluence area of .618 retracement and objective point (OP)
- 126.52 = .786 ret
- 126.82 = expanded objective point (XOP)

If th price keeps declining the immediate supports will be Fibonacci retracements of 119.93-127.25, and expansions off 127.25-123.85-125.63.

Supports:

- 123.59-53 = confluence area of .50 retracement and contracted objective point (COP)
- 122.73 = .618 ret
- 122.23 = objective point (OP)

Overbought/Oversold

Assuming that the major wave 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 (40-55 pips above the current prices).

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