The GBP/JPY is moving within corrective wave 4 of medium term uptrend - colored magenta in the chart. The targets of the downmove are Fibonacci retracements of 128.29-132.48, 130.43-132.48, expansions off 132.48-131.62-132.14.
Supports:
- 131.45 = .50 retracement, already hit (!)
- 131.28-21 = confluence area of objective point (OP) and .618 retracement
- 130.88 = .382 ret
- 130.75 = expanded objective point (XOP)
- 130.38 = .50 ret
- 129.89 = .618 ret
If the uptrend resumes the nearest resistances will be Fibonacci expansions off 125.47-129.41-128.29, 128.29-131.40-130.43.
Resistances:
- 133.54 = OP
- 134.66 = XOP
Overbought/Oversold
Assuming that the medium term trend is up it's preferable to take oversold readings of the Detrended Oscillator or its cross below the zero level to consider long positions. The oscillator is now above the zero level, therefore the current price is not suitable for long positions. Now it's better to wait until the price retraces to the oversold area (15-20 pips) to consider long positions.
Read more on how to apply Fibonacci studies to calculate price targets.
