Pound/yen is moving within wave C of the daily downtrend - colored royal blue in the chart. Within the daily wave there's a set of 2 subwaves with corrective wave B developing - colored magenta on the chart. The latter is also subdivided into smaller waves.
At this moment the targets of the downmove are Fibonacci expansions off the daily waves A-B - 135.03-130.78-132.93, and expansions off minor waves 132.93-129.98-130.36.
Supports:
- 128.68 = objective point (OP)
- 127.91 = contracted objective point (COP)
In case the price continues its advance the nearest resistances will be Fibonacci retracements of 132.93-128.97.
Resistances:
- 130.48 = .382 retracement
- 130.95 = .50 ret
- 131.42 = .618 ret
More resistances will be available when the price breaks above 130.36, which will provide 2 waves to build expansions off.
Overbought/Oversold
The Detrended Oscillator is moving back from the oversold area. Assuming that the prevailing trend is down it's preferable to seek for topping signals when the price hits a Fibonacci resistance or gets into the overbought - 20 pips to go.
Read more on how to apply Fibonacci studies to calculate price targets.
