The GBP/JPY is developing wave C of medium term downtrend - colored royal blue in the chart. On smaller scale this wave consists of A-B-C subwaves (colored magenta in the chart) with subwave C still developing. The targets of the downmove are Fibonacci expansions off 135.56-131.14-135.19, 135.19-132.97-134.40, 134.40-129.75-132.60, and retracements of 129.75-132.60.
Supports:
- 130.84 = .618 retracement
- 129.73 = contracted objective point (COP)
- 128.59 = super expanded objective point (SXOP)
- 128.04 = expanded objective point (XOP)
- 127.95 = objective point (OP)
If the price keeps moving up the immediate resistances will be Fibonacci retracements of 135.19-129.75, 134.40-129.75.
Resistances:
- 132.62 = .618 ret
- 133.11 = .618 ret
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 25-35 pips above the current price level.
Read more on how to apply Fibonacci studies to calculate price targets.
