GBP/JPY has develped wave A of the medium term downtrend 133.03-130.75 (colored magenta in the chart) and is now develping corrective wave B. The targets of the corrective upmove are Fibonacci retracements of 133.03-130.75 and 132.28-130.75.
Resistances:
- 131.62-70 = confluence area of .382 and .618 retracements
- 131.89 = .50 ret
- 132.16 = .618 ret
If the price keeps moving down and breaks below 130.75 to continue the downtrend the nearest supports will be Fibonacci expansions off 133.03-130.75-131.61 and retracements of 129.33-133.03.
Supports:
- 130.74 = .618 ret
- 130.20 = contracted objective point (COP)
- 129.33 = objective point (OP)
Overbought/Oversold
Assuming that medium term trend is down it's preferable to use overbought readings of the Detrended Oscilaltor with Fib resistances. The overbought area is 20-30 pips away but there's no Fib resistance in that area. So now it's reasonable to stand aside until the flat is broken.
Read more on how to apply Fibonacci studies to calculate price targets.
