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. On still smaller timeframe the latter subwave C consists of a smaller set of waves A-B-C - colored red in the chart, and wave C is still in development. The targets of the downmove are Fibonacci expansions off 134.40-129.75-132.60, 132.60-129.23-130.59.
Supports:
- 121.77 = super expanded objective point (SXOP)
- 120.43 = SXOP
If the price keeps advancing the immediate resistances will be Fibonacci retracements of 130.59-122.49, 132.60-122.49.
Resistances:
- 127.50-54 = confluence area of .618 and .50 retracements
- 128.74 = .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 (30-40 pips above the current price - this only roughly corresponds to 127.50-54 fib resistance area).
Read more on how to apply Fibonacci studies to calculate price targets.
