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). However this wave may turn into subwave A of longer term wave 5. Within current wave B we have A, B and C subwaves of still smaller degree with subwave C from 128.33 still developing (colored red in the chart).
Now the targets of the dowmove are Fibonacci retracements of 124.87-128.40 and expansions off 128.40-127.03-128.33, 128.33-127.40-128.15, 128.15-127.16-127.71.
Supports:
- 126.72-65-64 = confluence area of objective point (OP), expanded objective point (XOP), and .50 retracement
- 126.22 = .618 ret
- 126.11 = confluence area of two XOP's
- 125.72 = super expanded objective point
- etc.
If the price breaks above 128.40 the immediate resistances will be Fibonacci retracements of 132.30-124.87, 130.82-124.87.
Resistances:
- 128.55-59 = confluence area of .618 and .50 retracements
- 129.46 = .618 ret- 130.56 = objective point (OP)
Overbought/Oversold
Assuming that the medium term trend is now down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (current prices) or into the overbought area (20-30 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
