GBP/JPY is developing wave C of medium term downtrend (colored magenta in the chart). Within this wave C there are A-B-C subwaves (colored red) with subwave C still developing. The targets of the downmove are Fibonacci expansions off 133.03-130.75-131.61 (A-B waves), 131.61-129.55-130.30 (A-B subwaves).
Supports:
- 129.93 = contracted objective point (COP)
- 128.24 = objective point (OP)
- 127.92 = expanded objective point (XOP)
If the price keeps moving up its resistances will be Fibonacci retracements of 131.61-129.23, and 130.30-129.23.
Resistances:
- 129.76 = .50 retracement
- 129.89 = .618 ret
- 130.14 = .382 ret
- 130.42 = .50 ret
- 130.70 = .618 ret
Overbought/Oversold
Assuming that medium term trend is down it's preferable to use overbought readings of the Detrended Oscilaltor to open short positions. The overbought area lies 20 pips away and that is 129.76, 129.89 retracements.
Read more on how to apply Fibonacci studies to calculate price targets.
