GBP/JPY has finished upwave from 130.26 to 135.11. According to wave count on larger timeframes that was corrective wave B of long term downtrend - colored plum in the chart. Now the price stands at the beginning of potential impulse wave C. On smaller timeframes this wave has A and B subwaves in it - colored red in the chart. The targets of the currective upmove are Fibonacci retracements of 135.11-131.76 and expansions off 131.76-132.75-131.77.
Resistances:
- 132.76 = objective point (OP)
- 133.04 = .382 retracement
- 133.37-44 = confluence area of expanded objecive point (XOP) and .50 ret
- 133.82 = .618 ret
If the downtrend resumes the immediate supports will be Fibonacci retracements of 122.49-139.93, and expansions off 135.11-131.76-132.75.
Supports:
- 131.21 = .50 ret
- 130.68 = contracted objective point (COP)
- 129.40 = objective point (OP)
Overbought/Oversold
Assuming that the medium term trend is down it's preferable to try shorts when the Detrended Oscillator gets above the zero level (20-25 pips above the current prices) or into the overbought area (50-65 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
