GBP/JPY is developing impulse wave C of medium term downtrend - colored royal blue in the chart. The targets of the downmove are Fibonacci retracements of 122.49-139.93, and expansions off 139.93-130.26-135.11, 135.11-130.47-131.95.
Supports:
- 129.15-13-08 = confluence area of .618 retracement and two contracted objective points (COP)
- 127.31 = objective point (OP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 131.95-129.74, 135.11-129.74, and expansions off 129.74-130.73-129.91.
Resistances:
- 131.10 = .618 ret
- 131.51 = expanded objective point (XOP)
- 131.79 = .382 ret
- 132.43 = .50 ret
- 133.06 = .618 ret
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 (current prices) or into the overbought area (30-40 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
