GBP/JPY is developing impulse wave C of medium term downtrend from 133.32 (light green in the chart). Within this wave we have five subwaves (royal blue in the chart), and impulse subwave 5 is developing from 129.51. Within this wave there are two subwaves (red in the chart), and potential corrective subwave B is developing from 127.04.
The immediate resistances are Fibonacci retracements of 129.51-127.04.
Resistances:
- 127.98 = .382 retracement
- 128.28 = .50 ret
- 128.57 = .618 ret
If the downtrend resumes and the price breaks below 127.04, the immediate supports will be Fibonacci expansions off 133.42-129.94-133.32, 133.32-130.08-133.19, 133.19-127.82-129.51, 129.51-127.07-128.03.
Supports:
- 126.50 = contracted objective point (COP)
- 126.19 = COP
- 125.56 = objective point (OP)
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 (20-25 pips above the current prices) or into the overbought area (55-70 pips above the current prices). Watch for opportunities to go short at or near the indicated resistances.
