GBP/JPY is developing impulse wave C (colored light green in the chart) of medium term downtrend from 127.31. Within this wave there are five subwaves (colored royal blue in the chart) with impulse subwave 5 still developing from 124.36.
The targets of the downmove are Fibonacci expansions off 130.81-123.27-127.31, 127.31-124.47-126.55, 126.55-123.04-124.36, 124.36-121.27-122.55.
Supports:
- 120.85 = objective point (OP)
- 120.64 = contracted objective point (COP)
- 119.77 = OP
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 124.36-121.27.
Resistances:
- 122.45 = .382 retracement
- 122.82 = .50 ret
- 123.18 = .618 ret
Overbought/Oversold
Assuming that the major wave is down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (20-25 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.
