GBP/JPY is developing corrective subwave 4 (colored orange red in the chart) within impulse daily wave C - colored royal blue in the chart. The targets of the upmove are Fibonacci retracements of 133.03-125.47 and expansions off 125.47-129.41-128.29, 128.29-129.49-128.98.
Resistances:
- 130.72 = contracted objective point (COP)
- 130.92 = expanded objective point (XOP)
- 131.25 = .764 retracement
However if the price keeps moving down its nearest supports will be Fibonacci retracements of 128.29-130.37.
Supports:
- 129.58 = .382 retracement
- 129.33 = .50 ret
- 129.08 = .618 ret
Overbought/Oversold
Assuming that the medium term trend is up it's preferable to take oversold readings of the Detrended Oscillator to consider long positions. The oscillator is now below the zero level and the oversold area is within 10-20 pips - 129.85-75, which is a good moment to consider longs.
Read more on how to apply Fibonacci studies to calculate price targets.
