FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for January 3, 2012

GBP/JPY is moving down within impulse wave C (colored light green in the chart) from 122.71. Within this wave we have five subwaves (colored red in the chart), and subwave 5 is developing from 119.99. The immediate supports are Fibonacci expansions off 127.25-119.31-122.71, 122.71-121.54-122.21, 122.21-119.21-119.99.

Supports:

- 118.14 = contracted objective point (COP)
- 117.80 = COP
- 116.99 = objective point (OP)

If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 122.71-118.94.

Resistances:

- 120.38 = .382 retracement
- 120.82 = .50 ret
- 121.27 = .618 ret

Overbought/Oversold

Assuming that the major wave is now moving down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (current prices) or into the overbought area (15-20 pips above the current prices), watch for entries short at the indicated resistances.

Read more on how to trade with Fibonacci levels.