GBP/JPY is developing corrective wave 4 of medium term uptrend - colored royal blue in the chart. Wave 4 has 3 subwaves within it, and subwave C is still developing - colored red in the chart. The targets of the downmove are Fibonacci retracements of 130.18-139.93, 122.49-139.93, and expansions off 139.93-135.62-137.12.
Supports:
- 135.06 = .50 retracement
- 134.46 = contracted objective point (COP)
- 133.90 = .618 retracement
- 133.27 = .382 ret
- etc.
If the price reverses up the immediate resistances will be Fibonacci retracements of 139.93-135.44.
Resistances:
- 137.16 = .382 ret
- 137.69 = .50 ret
- 138.21 = .618 ret
Overbought/Oversold
Assuming that the medium term is down it's preferable to open short positions when the Detrended Oscillator gets above the zero level (current prices) or into the overbought area (right where the prices are - still better would be to wait until the price hits a Fib resistance, e.g. at 137.16).
Read more on how to apply Fibonacci studies to calculate price targets.
