The GBP/JPY is developing potential wave C of medium term downtrend - colored red in the chart. The targets of the downmove are Fibonacci retracements of 131.14-135.19, 132.97-134.33, and expansions off 135.19-132.97-134.33, 134.33-133.71-134.30.
Supports:
- 133.68-65 = confluence area of objective point (OP) and .50 retracement
- 133.49 = .618 ret
- 133.30 = expanded objective point (XOP)
- 132.96 = contracted objective point (COP)
- 132.69-68 = confluence area of .618 ret and super expanded objective point (SXOP)
- 132.11 = OP
If the price breaks above 134.33 and goes into the uptrend the immediate resistances will be Fibonacci expansions off 131.14-135.19-132.97, 132.97-134.33-133.71.
Resistances:
- 134.55 = COP
- 135.07 = objective point (OP)
- 135.47 = COP
Overbought/Oversold
Assuming that the medium term trend is down it's preferable to look for shorts when the Detrended Oscillator gets above the zero level, which is 20-25 pips away from the current price, or gets into the overbought area, which is 30-40 pips above the current price level.
Read more on how to apply Fibonacci studies to calculate price targets.
