GBP/JPY is developing corrective wave 4 in medium term uptrend (colored magenta in the chart). The targets of the downmove are Fibonacci retracements of 129.43-133.03 (wave 3) and expansions off 133.03-131.79-132.82 (subwaves A and B within wave 4).
Supports:
- 132.03 = contracted objective point (COP)
- 131.65-58 = confluence area of .382 retracement and objective point (OP)
- 131.23 = .50 ret
- 130.81 = confluence area of .618 retracement and expanded objective point (XOP)
If the price breaks above 133.03 to continue the uptrend the nearest resistances will be Fibonacci expansions off 129.33-131.74-129.43 (waves 1-2), 129.43-133.03-131.79 (wave 3 and potential wave 4).
Resistances:
- 133.33 = XOP
- 134.01 = COP
Overbought/Oversold
Assuming that the downmove is corrective it's preferable to stand aside or use overbought readings of the Detrended Oscillator for intraday short trades. Overbought area is 20-30 pips away.
Read more on how to apply Fibonacci studies to calculate price targets.
