FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for January 24, 2012

GBP/JPY is now developing potential corrective subwave 4 from 120.14 (colored red in the chart) that is part of impulse wave A of larger degree (colored light green in the chart) from 117.22.

The downwave has the following targets: Fibonacci retracements of 117.22-120.14, 117.49-120.14 (subwave 3).

Supports:

- 119.13 = .382 retracement
- 119.02 = .382 ret
- 118.82 = .50 ret
- 118.68 = .50 ret
- 118.50 = .618 ret
- 118.34 = .618 ret

However if the price breaks above 120.14 to continue subwave 5, we'll have the following resistances as targets: Fibonacci retracements of 127.25-117.22, 122.71-117.22.

Resistances:

- 120.61 = .618 ret
- 121.05 = .382 ret
- 121.54 = .786 ret

Overbought/Oversold

The bigger wave is now moving up, therefore it's preferable to try long positions when the Detrended Oscillator gets below the zero level (current prices) or into the oversold area (10-20 pips below the current prices). Watch for entries long at or near the indicated Fibonacci supports.

Read more on how to trade with Fibonacci levels.