At 117.22 GBP/JPY ended the whole wave from 122.71 - this is wave C of medium tern downtrend colored light green in the chart. Within the potential corrective wave 4 that is going up we have three subwaves - they are A, B and C colored red in the chart. Subwave C is still developing from 117.49. The targets now are Fibonacci retracements of 122.71-117-22, and expansions off 117.22-118.21-117.49.
Resistances:
- 119.09 = expanded objective point (XOP)
- 119.32 = .382 retracement
- 119.97 = .50 ret
- 120.08 = super expanded objective point (SXOP)
But if the price reverses to the downside the immediate supports will be Fibonacci retracements of 117.49-118.58, and 117.22-118.58.
Supports:
- 118.16 = .382 ret
- 118.06-04 = confluence area of .382 and .50 retracements
- 117.91-91 = confluence area of .618 and .50 retracements
- 117.74 = .618 ret
Overbought/Oversold
The bigger wave is now moving up, therefore it's preferable to try long positions when the Detrended Oscillator gets below the zero level (current prices) or into the oversold area (15-25 pips above the current prices). Watch for entries long at or near the indicated Fibonacci supports.
