GBP/JPY has finished potential wave 4 of the medium term uptrend (colored red in the chart) and is now moving in wave 5 (if the price breaks above 132.99) or in wave B (if the price stays below 132.99). At this moment the targets below the current price level are Fibonacci retracements of 129.43-132.99 and 129.51-132.99.
Supports:
- 131.66-63 = .618 retracements
- 131.25-21 = .50 retracements
- 130.84-79 = .618 retracements
If the price confirms wave 5 then its targets will be Fibonacci expansions off 129.33-131.74-129.43, 129.51-132.99-131.72, 131.72-132.78-132.44.
Resistances:
- 133.10 = contracted objective point (COP)
- 133.33 = expanded objective point (XOP)
- 133.50 = objective point (OP)
- 133.87 = COP
- 134.16 = expanded objective point (XOP)
Overbought/Oversold
Assuming that the prevailing trend is up it's preferable to use the Detrended Oscillator's oversold readings and in conjunction with Fib supports. Oversold area is 15-25 pips below the current price and only coinides with minor 132.38 support. Since there market is not volatile enought this reading and the support should be ignored.
Read more on how to apply Fibonacci studies to calculate price targets.
