The GBP/JPY has developed 5 waves of medium term downtrend (colored red in the chart) and they constitute one wave of a larger degree - wave A (colored magenta). Now the wave up is corrective according to wave count. The targets of the upmove are Fibonacci retracements of 135.56-131.14, and expansions off 129.75-135.56-131.14, 131.17-133.23-132.81.
Resistances:
- 133.87 = .618 retracement
- 134.08 = contracted objective point (COP)
- 134.73 = COP
- 134.87 = objective point (OP)
If the price reverses the immediate supports will be Fibonacci retracements of the wave up from 131.14 - this wave is not developed yet.
Overbought/Oversold
Assuming the trend is now up it's preferable to use oversold condition of the Detrended Oscillator (current prices minus 55-70 pips) or its cross below the zero level (15-20 pips) to consider long positions.
Read more on how to apply Fibonacci studies to calculate price targets.
