GBP/JPY is now developing impulse subwave C (colored red in the chart) of wave 5 (colored magenta) of medium term downtrend. The targets below the current price level are Fibonacci expansions off 135.03-126.43-134.19, 134.19-129.33-133.03, 131.61-127.43-128.54 (waves 3-4), 128.54-126.09-126.78 (subwaves A and B within wave 5).
Supports:
- 125.59 = objective point (OP)
- 125.27 = contracted objective point (COP)
- 125.17 = expanded objective point (XOP)
If the price reverses up the nearest resistances will be Fibonacci retracements of 128.54-125.47.
Resistances:
- 126.64 = .382 retracement
- 127.01 = .50 ret
- 127.37 = .618 ret
Overbought/Oversold
Assuming that the medium term trend is down it's preferable to use overbought readings of the Detrended Oscillator and a Fib resistance to consider shorts. The overbought area is 30-40 pips away from the current price which doesn't correspond to a major Fib resistance, so stand aside in the meantime or use minor resistances on smaller TF's.
Read more on how to apply Fibonacci studies to calculate price targets.
