GBP/JPY is developing impulse subwave (colored magenta in the chart) that is part of wave B of longer term downtrend (colored royal blue in the chart). The targets of the upmove are Fibonacci retracements of 130.81-123.27, and expansions off 123.27-126.95-125.66, 125.66-126.77-125.70.
Resistances:
- 127.50 = expanded objective point (XOP)
- 127.93 = confluence area of contracted objective point and .618 retracement
- 128.61 = super expanded objective point (SXOP)
If the price reverses to the downside the immediate supports will be Fibonacci retracements of 123.27-127.31.
Supports:
- 125.77 = .382 ret
- 125.29 = .50 ret
- 124.81 = .618 ret
Overbought/Oversold
Assuming that the major wave is up it's preferable to try long positions when the Detrended Oscillator gets below the zero level (current prices) or into the oversold area (20-30 pips below the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
