The GBP/JPY pair is developing a corrective wave B of the medium term uptrend from 133.42 (light green in the chart). Within this wave we have three subwaves (royal blue in the chart), A, B, and an impulse subwave C developing from 133.32. Within this wave there are three subwaves (magenta in the chart) and an impulse subwave C developing from 133.19. At smaller level there are A, B, and C waves within it (red in the chart) and potential corrective subwave 4 developing from 129.45.
Presently the downside targets are Fibonacci retracements 126.48-133.42 and expansions 133.42-129.94-133.32, 133.32-130.08-133.19, 133.19-130.71-131.92.
Supports:
- 129.13 = .618 retracement
- 127.95-91 = expanded objective point (XOP)
- 127.69 = XOP
If the price reverses to the upside, the immediate resistances will be Fibonacci retracements 133.19-129.45, 131.92-129.45 and expansions 129.45-130.54-129.99.
Resistances:
- 130.66-59 = confluence area of contracted objective point (COP) and .50 ret
- 130.88 = .382 ret
- 130.98 = .618 ret
- 131.08 = objective point (OP)
- 131.32 = .50 ret
- 131.75-76 = confluence area of .618 ret and XOP
Overbought/Oversold
The bigger wave is now moving downside, so it is recommended to try short positions when the Detrended Oscillator goes above the zero level (current prices) or into the overbought area (20-35 pips above the current prices). Look for the opportunities to go short at or near the indicated resistances.
