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 four subwaves (colored red) and potential subwave 5 that is developing now. Within subwave 5 there are still smaller A-B-C waves - colored orange red. The targets of the downmove are Fibonacci expansions off 135.03-126.43-134.19, 134.19-129.33-133.03, 133.03-130.75-131.61 (waves 1-2), 131.61-127.43-128.54 (waves 3-4), 128.54-127.69-128.41 (subwaves A-B within wave 5), 128.41-127.79-128.06 (still smaller waves).
Supports:
- 127.44 = objective point (OP)
- 127.06-03 = confluence area of two expanded objective points (XOP)
- 126.44 = super expanded objective point (SXOP)
- 126.18 = SXOP
- 125.96 = contracted objective point (COP)
If the price reverses up the nearest resistances will be Fibonacci retracements of 131.61-127.43.
Resistances:
- 129.03 = .382 retracement
- 129.52 = .50 ret
Overbought/Oversold
Assuming that the prevailing trend is down it's preferable to use overbought readings of the Detrended Oscillator. The overbought area is 30-40 pips away from the current price.
Read more on how to apply Fibonacci studies to calculate price targets.
