The GBP/JPY is moving in medium term uptrend and is now developing corrective subwave B (colored magenta) within impulse wave C (colored royal blue) of the medium term uptrend. The targets of the downmove are Fibonacci retracements of 131.62-134.31, 132.54-134.31, and expansions off 134.31-133.31-133.94.
Supports:
- 133.32-28-22 = confluence area of contracted objective point (COP), .382 and .618 retracements
- 132.97-94 = confluence area of .50 ret and objective point (OP)
- 132.65 = .618 ret
- 132.32 = expanded objective point (XOP)
If the uptrend resumes the immediate resistances will be Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-133.31-131.62, 131.62-134.31-133.31.
Resistances:
- 134.85 = expanded objective point (XOP)
- 134.97 = COP
- 135.18 = objective point (OP)
Overbought/Oversold
Assuming that the medium term trend is still up, it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero level to consider long positions. The oscillator is now flattening around the zero level, therefore wait until the price breaks the flat to the upside.
Read more on how to apply Fibonacci studies to calculate price targets.
