GBP/JPY is developing corrective wave B (colored light green in the chart) of medium term downtrend from 119.31. Within this wave there are A and B subwaves (colored royal blue in the chart), with subwave B still developing from 122.64. The immediate supports are Fibonacci retracements of 119.31-122.64, and expansions off 122.64-120.86-122.17, 122.17-120.65-121.73.
Supports:
- 120.39 = objective point (OP)
- 120.21 = OP
- 119.29-27 = confluence area of two expanded objective points (XOP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 121.73-120.45.
Resistances:
- 120.94 = .382 retracement
- 121.09 = .50 ret
- 121.24 = .618 ret
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 (5-10 pips above the current prices) or into the overbought area (45-60 pips above the current prices), watch for entries short at the specified resistances.
Read more on how to apply Fibonacci studies to calculate price targets.
