GBP/JPY is trading in flat limited by 133.78 and 132.17. The breakout of the flat will show the direction of medium term trend. According to wave count this flat is corrective wave B against 129.82-133.78. The targets of the downmove are Fibonacci retracements of 129.82-133.78, 130.96-133.78, and expansions off 133.78-132.17-132.96.
Supports:
- 132.04-131/97 = confluence area of .618 retracement and expanded objective point (XOP)
- 131.80 = .50 ret
- 131.35-33 = confluence area of .618 ret and objective point (OP)
- 130.36 = XOP
If the price reverses up to continue the uptrend the nearest resistances will be Fibonacci retracements of 133.78-132.17 and expansions off 132.17-132.96-132.20, 129.82-133.78-132.17.
Resistances:
- 132.97-99 = confluence area of .50 ret and OP
- 133.16 = .618 ret
- 133.48 = XOP
- 134.62 = contracted objective point (COP)
Overbought/Oversold
The Detrended Oscillator is flattening around the zero level, confirming the range bound market. Assuming that the prevailing trend is still up it's preferable to use bounces from Fib supports or oversold condition (30 more pips to go) to open longs.
Read more on how to apply Fibonacci studies to calculate price targets.
