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, 128.15-126.69-127.37.
Supports:
- 126.47 = contracted objective point (COP)
- 126.22 = .618 ret
- 126.11 = expanded objective point (XOP)
- 125.91 = objective point (OP)
- 125.72 = super expanded objective point
- etc.
If the price reverses to the upside 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 (35-45 pips above the current prices) or into the overbought area (50-60 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
