The GBP/JPY has developed 5 waves of medium term downtrend. Wave 5 is 128.54-125.47 - colored magenta in the chart. Now corrective wave A has A-B-C subwaves with subwave C still developing - colored orange red in the chart. The targets of the upmove are Fibonacci retracements of 128.54-125.47 and expansions off 125.47-126.53-125.57, 125.57-126.12-125.74.
Resistances:
- 127.01 = .50 retracement, the price reversed just within 1 pip
- 127.18 = super expanded objective point (SXOP)
- 127.29 = expanded objective point (XOP)
- 127.37 = .618 ret
If the price reverses down the nearest supports will be Fibonacci expansions of the wave up from 125.47 - this wave is not developed yet.
Overbought/Oversold
Assuming that the medium term trend is up it's preferable to use oversold readings of the Detrended Oscillator and a Fib support to consider long positions. The oversold area is 30-45 pips away from the current price - 126.20-10.
Read more on how to apply Fibonacci studies to calculate price targets.
