GBP/JPY is now developing impulse wave A of medium term downtrend (royal blue in the chart). Within this wave we have subwaves A, B, and C (red in the chart), and subwave C is still developing from 129.43. Within it there are A, and B subwaves (orange red in the chart), subwave B is developing from 126.48.
Now the targets of the downmove are Fibonacci expansions off 130.04-128.16-129.43, 129.43-126.48-127.27.
Supports:
- 126.39 = expanded objective point (XOP)
- 125.45 = contracted objective point (COP)
- 124.51 = super expanded objective point (SXOP)
- 124.32 = objective point (OP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 130.04-126.48.
Resistances:
- 127.84 = .382 retracement
- 128.26 = .50 ret
- 128.68 = .618 ret
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 (5-10 pips above the current prices) or into the oversold area (45-65 pips above the current prices). Watch for opportunities to go short at or near the indicated resistances.
