04.02.201111:07 Forex Analysis & Reviews: GBP/JPY Elliott wave count and Fibonacci levels - February 4, 2011

The GBP/JPY is developing corrective wave B to 129.75-133.00 (if this wave is to be subwave A - colored magenta in the chart - within wave C of larger degree - colored royal blue in the chart). Or this wave may become wave A and terminate all the movement up from 129.49 to 133.00.

The targets of the downmove as of now are Fibonacci retracements of 129.49-133.00, 129.75-133.00, and expansions off 133.00-131.52-131.98.

Supports:

- 131.38 = .50 retracement
- 131.25 = .50 ret
- 131.07-130.00 = confluence area of contracted objective point (COP) and .618 ret
- 130.83 = .618 ret
- 130.50 = objective point (OP)

If the uptrend resumes then the nearest resistances will be Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-133.00-131.52.

Resistances:

- 133.53 = COP
- 133.82 = COP

Overbought/Oversold

Assuming that the medium term trend is still up but a corrective wave is developing it's preferable to wait until the retracement ends at one of the Fib supports and start considering longs if a wave up manifests itself. Detrended Oscillator's oversold condition (20-30 pips below the current price) may serve as a confirmation.

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