GBP/JPY, according to wave count, has developed 5 waves of the med term downtrend - colored magenta on the chart. The current upwave is considered the beginning of a corrective cycle. However nothing stops the price from falling below 132.43 - then we'll have an extension.
The targets of the upside movement are Fibonacci retracements of 137.75-132.43 and expansions off 132.43-133.72-132.82:
- 133.62 = contracted objective point (COP), reached already
- 134.11 = objective point (OP)
- 134.46 = .382 retracement
- 134.91 = expanded objective point (XOP)
- 135.09 = .50 ret
- etc.
In case we have an extension of the med term downtrend, the prices remain basically the same:
- 130.97 = super expanded objective point (SXOP) off waves 1-2
- 130.61 = objective point (OP) off waves 3-4 (see previous reports)
Overbought/Oversold
The Detrended Oscillator is slightly above the zero level. Nearest overbought area - 20-40 pips above, nearest oversold - 30-50 pips below. Assuming that the major downtrend may be reversing, it's better to stand aside until the situation clears.
