GBP/JPY has finished the upwave from 135.11 to 130.63. According to wave count on larger timeframes that was subwave A of long term impulse wave C - colored plum in the chart. Now the price stands at the beginning of potential corrective subwave C. The targets of the corrective upmove are Fibonacci retracements of 135.11-130.63.
Resistances:
- 132.34 = .382 retracement
- 132.87 = .50 ret
- 133.40 = .618 ret
If the downtrend resumes the immediate supports will be Fibonacci retracements of 122.49-139.93, and expansions off 139.93-130.26-135.11, 135.11-130.63-132.27.
Supports:
- 129.50 = contracted objective point (COP)
- 129.15-13 = confluence area of .618 retracement and COP
- 127.79 = 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 (5-10 pips above the current prices) or into the overbought area (25-35 pips above the current prices - this roughly corresponds to 132.34 Fib resistance level).
Read more on how to apply Fibonacci studies to calculate price targets.
