The GBP/JPY is now developing corrective subwave B (colored orange red in the chart) within impulse wave C of the medium term downtrend (colored red in the chart). The targets of the upmove are Fibonacci retracements of 135.56-131.49, 134.62-131.49.
Resistances:
- 132.69 = .382 retracement
- 133.04-06 = confluence area of .382 and .50 retracements
- 133.42-53 = .618 and .50 retracements
- 134.01 = .618 ret
If the price continues the downtrend it's immediate supports will be Fibonacci expansions off 135.56-133.31-134.62.
Support:
- 130.98 = expanded objective point (XOP)
Overbought/Oversold
Assuming that wave C of the medium term trend down is developing, it's preferable to use overbought readings (15-25 pips away from the current price) of the Detrended Oscillator to consider short positions. The overbought area roughly corresponds to Fib resistance at 132.69.
Read more on how to apply Fibonacci studies to calculate price targets.