The GBP/JPYpair is developing the potential corrective wave B (royal blue in the chart) of the medium term downtrend as long as the 130.04 remains unbroken to the upside. Within this wave there are subwaves A and B (red in the chart), B developing from 129.69.
Presently the downside targets are provided by Fibonacci retracements of 126.48-129.69 and expansions 130.04-126.48-129.69.
Supports:
- 128.46 = .382 retracement
- 128.09 = .50 ret
- 127.71 = .618 ret
- 127.49 = contracted objective point (COP)
- 126.13 = objective point (OP)
However, if the price continues the ascending movement, the immediate resistances will be provided by Fibonacci expansions 126.48-126.69-128.60.
Resistances:
- 130.58 = COP
- 131.81 = OP
Overbought/Oversold
The bigger wave is presently considered as ascending one, so it is recommended to open long positions when the Detrended Oscillator goes below the zero level (10-15 pips below the current prices) or into the oversold area (50-70 pips below the current prices). Mind the opportunities for long positions at or near the indicated supports.
