GBP/JPY is developing wave A (colored light green in the chart) of medium term downtrend from 127.25. Within this wave there are four subwaves (colored royal blue in the chart), and corrective subwave 4 is still developing from 119.31. Within the latter there are two subwaves (colored red in the chart) and corrective subwave B is developing from 121.62. The targets of the upmove are Fibonacci retracements of 125.63-119.31, and expansions off 119.31-121.62-120.70.
Resistances:
- 121.72 = .382 retracement
- 122.13 = contracted objective point (COP)
- 122.47 = .50 ret
- 123.01 = objective point (OP)
- 123.22 = .618 ret
If the price reverses to the downside the immediate supports will be Fibonacci retracements of 119.32-121.62, 119.82-121.62.
Supports:
- 120.74-72 = confluence area of .50 and .382 retracements
- 120.51-47 = confluence area of .618 and .50 ret
- 120.19 = .618 ret
Overbought/Oversold
Assuming that the major wave is now up it's preferable to try long positions when the Detrended Oscillator gets below the zero level (15-20 pips below the current prices) or into the oversold area (35-45 pips below the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
