GBP/JPY is developing wave C of medium term downtrend (the wave and expansions off A-B waves are colored magenta in the chart). Within this wave C there are A-B-C subwaves (colored red) and subwave 4 that is developing now. Within subwave 4 there are still smaller A-B-C waves - colored yellow. The targets of the corrective upmove are Fibonacci retracements of 130.30-127.43 and expansions off 127.43-128.54-127.69.
Resistances:
- 128.38 = contracted objective point (COP)
- 128.53 = .382 retracement, hit precisely (!)
- 128.80-87 = confluence area of objective point (OP) and .50 retracement
- 129.20 = .618 ret
- 129.49 = expanded objective point (XOP)
If the price coninues the downtrend its targets will be expansions 133.03-130.75-131.61 (A-B waves), 131.61-129.55-130.30 (subwaves 1-2), 130.30-127.43-128.54 (subwaves 3-4)
Supports:
- 126.97 = XOP
- 126.77 = COP
- 126.67-64 = confluence area of OP and super expanded objective point (SXOP)
Overbought/Oversold
Assuming that the prevailing trend is down it's preferable to use overbought readings of the Detrended Oscillator in conjunction with Fib resistances. The overbought area is 30-40 pips away from the current price which corresponds to 128.38 resistance.
Read more on how to apply Fibonacci studies to calculate price targets.
