Pound/yen is developing wave C of a midterm uptrend - colored magenta in the chart. Within this wave C there is a corrective subwave 4 developing. Its targets are Fibonacci retracements of 128.87-131.24 and 127.96-131.24.
Supports:
- 130.06-129.99 = confluence area of .50 and .382 retracements
- 129.78 = .618 ret
- 129.60 = .50 ret
- 129.22 = .618 ret
In case the medium term trend continues up the nearest resistances will be Fibonacci retracements of 135.03-126.43, and expansions off 126.43-129.58-127.96, 127.96-130.32-128.87.
Resistances:
- 131.74 = .618 retracement
- 132.69 = expanded objective point (XOP)
- 133.06 = XOP
Overbought/Oversold
The Detrended Oscillator is in the oversold area. This may be a good indication of weakness that is suitable for a long position. Assuming that the midterm trend is up, it is preferable to seek for bottoming signals when the price hits a Fib support to enter long.
Read more on how to apply Fibonacci studies to calculate price targets.
