Pound/yen has just developed wave 132.93-127.33 (wave 3 or C). The wave above 127.33 is considered corrective (4 - colored royal blue in the chart). The tragets of the corrective upmove are Fibonacci retracements of 130.69-127.33, 131.93-127.33.
Resistances:
- 129.41-47 = confluence area of .618 and .382 retracements
- 130.13 = .50 ret
- 130.79 = .618 ret
The wave below 127.33 will be wave 5. Its targets are Fibonacci expansions off 135.03-130.78-132.93, and 132.93-127.33-129.21.
Supports:
- 126.05 = expanded objective point (XOP)
- 125.75 = contracted objective point (COP)
Overbought/Oversold
The Detrended Oscillator is in the oversold with the latest peak exceeding the previous. Although the wave count shows that the wave up is of the same degree as 132.93-127.33, the current wave down may break below 127.33 to become wave 5. In view of this it's preferable to stand aside.
Read more on how to apply Fibonacci studies to calculate price targets.
