Pound/yen has developed 5 waves of midterm uptrend - colored red in the chart. Now we have wave A of the potential A-B-C sequence developing. The targets of the corrective downmove are Fibonacci retracements of 127.96-131.99, 128.87-131.99.
Supports:
- 130.45-43 = confluence area of .382 and .50 retracements
- 130.06-129.97 = confluence area of .618 and .50 retracements
- 129.50 = .618 ret
In case the uptrend continues the nearest resistances will be Fibonacci expansions off 126.43-129.58-127.96, 127.96-131.99-130.47.
Resistances:
- 132.27 = objective point (OP)
- 132.96-133.06 = confluence area of contracted objective point (COP) and expanded objective point (XOP)
- 133.21 = XOP
Overbought/Oversold
The Detrended Oscillator is at the zero level, indicating a retracement of the med term A wave. Assuming that the move down is corrective it would be reasonable to stand aside until a wave up show itself. Therefore caution is needed when the price nears a Fibonacci support or gets into the oversold - 40 pips to go. These are the areas of the start of potential upmove.
Read more on how to apply Fibonacci studies to calculate price targets.