The GBP/JPY is developing a corrective wave against 129.75-133.31 (colored royal blue in the chart). This B wave has the potential to become subwave B within wave C of larger degree is 133.31 is broken to the upside. The targets of the downmove (if 133.31 remains intact) are Fibnoacci retracements of 129.49-133.31, 129.75-133.31.
Supports:
- 131.53 = .50 retracement
- 131.40 = .50 ret
- 131.11 = .618 ret
- 130.95 = .618 ret
If the price keeps advancing then the immediare resistances will be Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-133.31-131.62, 131.62-132.97-132.30.
Resistances:
- 133.13 = contracted objective point (COP)
- 133.65 = objective point (OP)
- 133.82 = confluence area of two contracted objective points (COP)
- 134.48 = expanded objective point (XOP)
Overbought/Oversold
Assuming that the medium term uptrend is continuing, it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level to consider short positions. The oscillator is now going down from the overbought area. The zero level is 10 pips away from the current price (132.95) and the oversold area is 30-40 pips away (132.85-75).
Read more on how to apply Fibonacci studies to calculate price targets.
