GBP/JPY has finished upwave 129.33-133.03 and is now developing corrective wave B against it (colored royal blue in the chart). The downwave B now consists of two subwaves A and B, with subwave B still developing (colored red in the chart).
The targets below the current price level are Fibonacci retracements of 129.33-133.03, 129.43-133.03, and expansions off 133.03-131.27-132.22.
Supports:
- 131.23-18-13 = confluence area of two .50 retracements and contracted objective point (COP)
- 130.81-74 = .618 retracements
- 130.46 = objective point (OP)
If the price reverses up the nearest resistances will be retracements of 133.03-131.27, 132.82-131.27.
Resistances:
- 132.23 = .618 ret
- 132.36 = .618 ret
Overbought/Oversold
Assuming that medium term trend is down it's preferable to use overbought readings of the Detrended Oscilaltor with Fib resistance. The overbought area is 40-50 pips away and that corresponds to 132.23 resistance - this level may be used to consider short positions.
Read more on how to apply Fibonacci studies to calculate price targets.
