GBP/JPY is trading within impulse wave C of medium term downtrend (colored light green in the chart), and within this wave we have corrective subwave B (colored magenta in the chart), that is developing from 118.94. The targets of the potential corrective wave are fibonacci retracements of 122.71-118.94.
Resistances:
- 120.38 = .382 retracement
- 120.82 = .50 ret
- 121.27 = .618 ret
- 121.90 = .786 ret
But if the price reverses to the downside from 120.14, the immediate supports will be Fibonacci expansions off 127.25-119.31-122.71, 122.71-118.94-120.14, 120.14-119.54-119.93.
Supports:
- 119.56-54 = confluence area of contracted objective point (COP) and .50 ret
- 119.40 = .618 ret
- 119.33 = objective point (OP)
- 119.20 = .786 ret
- 118.96 = expanded objective point (XOP)
- 118.36 = super expanded objective point (SXOP)
- 117.81-80 = confluence area of two contracted objective points (COP)
Overbought/Oversold
Assuming that the major wave is now moving 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 (30-40 pips above the current prices).
