GBP/JPY is still developing impulse wave C of medium term downtrend (colored light green in the chart) from 122.71, 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 up 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
However if the price reverses to the downside from 120.14 and breaks below 118.94, the immediate supports will be Fibonacci expansions off 127.25-119.31-122.71, 122.71-118.94-120.14.
Supports:
- 117.81-80 = confluence area of two contracted objective points (COP)
- 116.37 = objective point (OP)
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 (current prices) or into the overbought area (20-30 pips above the current prices).
