FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels for January 27, 2012

The five waves from 117.22 to 121.98 formed wave A of a larger degree (now colored magenta in the chart), and now GBP/JPY is developing corrective wave B against this uptrend. Within this wave we have A, B and C subwaves (colored orange red in the chart) with subwave C still developing from 121.81.

The targets below are Fibonacci retracements of 117.22-121.98, and expansions off 121.98-121.16-121.81.

Supports:

- 120.48 = expanded objective point (XOP)
- 120.16 = .382 retracement
- 119.66-60 = confluence area of super expanded objective point (SXOP) and .50 ret

But if the price reverses to the upside to break above 121.98, the immediate resistances will be Fibonacci retracements of 127.25-117.22

Resistances:

- 122.24 = .50 retracement
- 123.42 = .618 ret

Overbought/Oversold

The bigger wave is now moving down, therefore it's preferable to try short positions when the Detrended Oscillator goes above the zero level (30-40 pips above the current prices) or into the overbought area (60-75 pips above the current prices).

Read more on how to trade with Fibonacci levels.