GBP/JPY is developing impulse wave C (colored light green in the chart) of medium term uptrend from 116.91. Within this wave there are four subwaves (colored royal blue in the chart), and corrective subwave 4 is still developing from 127.25. Within the latter wave there three waves (colored orange red in the chart) with subwave C developing from 125.24. The targets of the downmove are Fibonacci retracements of 119.93-127.25, and expansions off 127.25-124.20-125.24.
Supports:
- 123.59 = .50 retracement
- 123.36 = contracted objective point (COP)
- 122.73 = .618 ret
- 122.19 = objective point (OP)
- 120.31 = expanded objective point (XOP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of the wave down from 127.25 - this wave is not developed, so no resistances are available so far.
Overbought/Oversold
Assuming that the major wave 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 (100-140 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
