The GBP/JPY is developing wave C of medium term downtrend - colored magenta in the chart. On smaller scale this wave consists of A and B subwaves (colored yellow in the chart) with subwave B still developing. The targets of the upmove are Fibonacci retracements of 134.40-132.97 and expansions off 131.14-135.19-132.97.
Resistances:
- 133.52 = .382 retracement
- 133.69 = .50 ret
- 133.85 = .618 ret
- 135.47 = contracted objective point (COP)
If the downtrend resumes and the price breaks below 132.97 the immediate supports will be Fibonacci retracements of 131.14-135.19, and expansions off 135.19-132.97-134.40.
Supports:
- 132.69 = .618 ret
- 132.18 = objective point (OP)
- 130.81 = expanded objective point (XOP)
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 (current prices), or into the overbought area, which is 10-20 pips above the current price level.
Read more on how to apply Fibonacci studies to calculate price targets.
