GBP/JPY is developing potential impulse subwave C (colored red in the chart), that is part of corrective wave 4 (colored royal blue in the chart).
The targets of the upmove are Fibonacci retracements of 137.03-130.26, and expansions off 130.26-133.16-130.74, 130.74-132.96-131.93, 131.93-132.96-132.29.
Resistances:
- 132.93 = contracted objective point (COP)
- 133.27-29-32 = confluence area of (COP), .382 retracement, and objective point (OP)
- 133.64 = confluence area of OP and .50 ret
- 133.96 = expanded objective point (XOP) and OP
If the price keeps declining the immediate supports will be Fibonacci retracements of 122.49-139.93, and expansions off 139.93-132.90-137.03, and also retracements of 130.74-132.96.
Supports:
- 132.11 = .382 ret
- 131.85 = .50 ret
- 131.59 = .618 ret
- 130.00 = OP
- 129.15 = .618 ret
Overbought/Oversold
Assuming that the medium term trend is down but a corrective wave up is developing it's preferable to stand aside or try longs when the Detrended Oscillator gets below the zero level (20-25 pips below the current prices) or into the oversold area (45-55 pips below the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
