GBP/JPY has possibly ended corrective wave B of medium term downtrend (colored royal blue in the chart - 139.93-132.90) and is now beginning subwave A (colored magenta in the chart) of a new leg down. As of now there are four waves of smaller degree in potential subwave A - colored red in the chart. The targets of the upmove are Fibonacci retracements of 135.86-133.99, and 139.93-132.90.
Resistances:
- 134.70 = .382 retracement
- 134.93 = .50 ret
- 135.15 = .618 ret
- 136.42 = .50 ret
If the downtrend resumes the immediate supports will be Fibonacci retracements of 132.90-135.87 and expansions off 135.87-134.71-135.86.
Supports:
- 134.03-133.98 = confluence area of .618 ret and expanded objective point (XOP)
- 132.82 = super expanded objective point (SXOP)
Overbought/Oversold
Assuming that the wave of a larger degree is moving down it's preferable to open short positions when the Detrended Oscillator gets above the zero level (current prices) or into the overbought area (15-30 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
