According to wave count pound/yen is developing corrective subwave B (colored magenta) within wave 5 of a larger degree (colored royal blue in the chart). The targets of the corrective upmove are Fibonacci retracements of 129.21-126.43.
Resistances:
- 127.49 = .382 retracement
- 127.82 = .50 ret
- 128.15 = .618 ret
In case the price resumes its long term downtrend the nearest supports will be Fibonacci expansions off 135.03-130.78-132.93 (waves 1-2), 132.93-127.33-129.21 (waves 3-4), and 129.21-126.43-127.39 (minor waves in wave 5).
Supports:
- 126.05 = expanded objective point (XOP)
- 125.75-67 = confluence area of two contracted objective points (COP)
- 124.61 = objective point (OP)
Overbought/Oversold
The Detrended Oscillator is oscillating around the zero level confirming the flat. Assuming that the prevailing trend is down, now is not the time to enter short. It's preferable to wait for a retracement to a Fib resistance or when the price moves into the overbought area - 20-30 pips to go.
Read more on how to apply Fibonacci studies to calculate price targets.
