GBP/JPY is developing corrective wave 4 of medium term downtrend from 123.27 (colored red in the chart). This wave 4 is part of larger wave A from 130.81 - colored royal blue in the chart. Within wave 4 there are three subwaves (colored orange red in the chart) with subwave C still developing from 123.95.
The targets of the upmove are Fibonacci retracements of 130.81-123.27, 128.87-123.27, and expansions off 123.27-124.96-123.95.
Resistances:
- 125.64 = objective point (OP)
- 126.07-15 = confluence area of .50 and .382 retracements
- 126.68-73 = confluence area of expanded objective point (XOP) and .618 ret
- 127.04 = .50 ret
- 127.93 = .618 ret
- 128.37 = super expanded objective point (SXOP)
If the price reverses to the downside the targets of the downmove will be Fibonacci expansions off 130.81-127.38-128.87, 128.87-123.27-125.61.
Supports:
- 122.15 = contracted objective point (COP)
- 120.01 = OP
- 119.89 = SXOP
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 (10-15 pips above the current prices) or into the overbought area (55-70 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
