The GBP/JPY is developing impulse subwave C (colored magenta in the chart) within wave C of larger degree (colored royal blue in the chart). Now the targets of the upmove are Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-133.31-131.62, 131.62-134.31-133.24.
Resistances:
- 135.93 = objective point (OP)
- 136.50 = OP
If the price doesn't break above 135.51 and keeps declining it's immediate supports will be Fibonacci retracements of 133.24-135.51.
Supports:
- 134.64 = .382 retracement
- 134.38 = .50 ret
- 134.11 = .618 ret
Overbought/Oversold
Assuming that the medium term trend is 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 going down from above the zero level, therefore we waint until a Fib support is hit or the oscillator gets into the oversold area - 20-20 pips away from the current price.
Read more on how to apply Fibonacci studies to calculate price targets.
