GBP/JPY has developed five waves of medium term uptrend (colored magenta in the chart) from 119.53 to 129.71. Now potential corrective wave A is developing from 129.71. The targets of the downmove are Fibonacci retracements of 119.53-129.71, and expansions off 129.71-126.63-128.39.
Supports:
- 126.49 = contracted objective point (COP)
- 125.82 = .382 retracement
- 125.31 = objective point (OP)
- 124.62 = .50 ret
- 123.42-41 = confluence area of expanded objective point (XOP) and .618 ret
If the uptrend continues the immediate resistances will be Fibonacci expansions off 119.53-123.11-121.62, 121.62-126.77-125.41, 125.41-129.71-126.63.
Resistances:
- 130.56 = OP
- 130.93-99 = confluence area of OP and super expanded objective point (SXOP)
Overbought/Oversold
The bigger wave is now moving down, so it's preferable to try short positions when the Detrended Oscillator goes above the zero level (25-30 pips above the current prices) or into the overbought area (65-85 pips above the current prices). Watch for opportunities to go short at or near the indicated resistances.
