Pound/yen is still developing daily downtrend within wave C (colored light green on the chart). Within this wave we have a set of A-B waves (colored magenta) and wave C developing. The latter was confirmed on 128.64 break. However from a minor perspective this wave is being corrected. The correction might be over, since .618 (130.21) has been perfectly reached. To confirm continuation of wave C the price has to break out 127.89 to the downside.
The targets of the downside movement are Fibonacci expansions off 137.75-128.77-133.59 (daily A-B), 133.59-128.64-131.65 (hourly A-B - the magenta waves), and 131.65-127.89-130.30. We should also consider Fib retracements of 127.89-130.30.
Supports:
- 128.82 = .618 retracement
- 127.98 = contracted objective point (COP)
- 126.70 = objective point (РћР )
- 126.54 = OP
The targets of the corrective upside movement are Fibonacci retracements of 131.65-127.89.
Resistances:
- 130.21 = .618 ret; reached already (!)
Overbought/Oversold
The Detrended Oscillator is in the oversold area. The nearest overbought is 80-90 pips above the current price (according to the oscillator). Assuming that the prevailing trend is down, it's advisable to seek for topping signals against Fibonacci resistances of in the overbought area to enter short.