GBP/JPY is now moving within corrective wave 4 of long term downtrend - colored light green in the chart. Within this wave there are A and B subwaves with subwave B from 128.40 still developing (colored royal blue in the chart). Within wave B we have A and B subwaves of still smaller degree with subwave B from 127.03 still developing (colored red in the chart).
If the price breaks above 128.40 the immediate resistances will be Fibonacci retracements of 132.30-124.87, 130.82-124.87, and expansions off 124.87-128.40-127.03.
Resistances:
- 128.55-59 = confluence area of .618 and .50 retracements
- 129.21 = contracted objective point (COP)
- 129.46 = .618 ret
- 130.56 = objective point (OP)
If the price reverses to the downside the immediate supports will be Fibonacci retracements of 124.87-128.40 and expansions off 128.40-127.03-128.33.
Supports:
- 127.05 = .382 retracement
- 126.96 = OP
- 126.64 = .50 ret
- 126.22 = .618 ret
- 126.11 = expanded objective point (XOP)
Overbought/Oversold
Assuming that the medium term trend is now up it's preferable to try long positions when the Detrended Oscillator gets below the zero level (current prices) or into the oversold area (15-25 pips below the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
