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 three subwaves (colored red in the chart) and impulse subwave C is developing from 120.70. The targets of the upmove are Fibonacci retracements of 127.25-119.31, 125.63-119.31, and expansions off 119.31-121.62-120.70.
Resistances:
- 122.13 = contracted objective point (COP)
- 122.34 = .382 retracement
- 122.47 = .50 ret
- 123.01 = objective point (OP)
- 123.22 = .618 ret
- 123.28 = .50 ret
If the price reverses to the downside the immediate supports will be Fibonacci retracements of 119.31-121.82.
Supports:
- 120.82 = .382 ret
- 120.57 = .50 ret
- 120.27 = .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 (current prices) or into the oversold area (10-20 pips below the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.
