GBP/JPY is developing wave 5 of medium term uptrend - colored magenta in the chart. However, if 137.80 (start of wave 5) is broken to the downside, all this 5-wave cycle will be complete. Now the targets of the dowmove are Fibonacci retracements of 135.10-139.93, 130.18-139.93.
Supports:
- 138.08 = .382 retracement
- 137.51 = .50 ret
- 136.95 = .618 ret
- 136.21 = .382 ret
- etc.
If the uptrend resumes and the price breaks above 139.93 the immediate resistances will be Fibonacci expansions off 122.49-133.04-130.18, 130.18-139.60-137.80, 137.80-139.93-138.37.
Resistances:
- 140.50 = objective point (OP)
- 140.73 = OP
- 141.82 = expanded objective point (XOP)
Overbought/Oversold
Assuming that the medium term is now up but stalling it may be worth while trying short positions when the Detrended Oscillator gets above the zero level (40-45 pips above the current prices) or into the overbought area (75-90 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
