GBP/JPY has finished wave 131.61-129.55 (wave A - colored red in the chart) and is now developing corrective wave B. The targets of the correction are Fibonacci retracements of 131.61-129.55 and 130.62-129.55.
Resistances:
- 130.21 = .618 retracement
- 130.34 = .382 ret
- 130.58 = .50 ret
- 130.82 = .618 ret
If the price breaks below 129.55 to continue the downtrend the nearest target will be the expansions (objective point) off 133.03-130.75-131.61.
Support:
- 129.33 = objective point (OP)
More targets will be available when the size of the upwave is known.
Overbought/Oversold
Assuming that medium term trend is down but corrective wave B is developing it's preferable to use oversold readings of the Detrended Oscilaltor for short-term buys. The overbought area lies 30-40 pips away, i.e. the market is a bit overextended to the upside. So stand aside and open longs only when weakness appears.
Read more on how to apply Fibonacci studies to calculate price targets.
