GBP/JPY has developed 5 waves of medium term downtrend (colored red in the chart). Now potential wave A of corrective A-B-C cycle is developing. The targets of the upmove are Fibonacci retracements of 134.24-130.89, 137.03-130.89, and expansions off 130.89-132.82-131.47.
Resistances:
- 132.66 = contracted objective point (COP)
- 132.96 = .618 retracement
- 133.24 = .382 ret
- 133.40 = objective point (OP)
- 133.96 = .50 ret
- 134.59-68 = confluence area of expanded objective point and .618 ret
If the downtrend resumes the immediate supports will be Fibonacci retracements of 122.49-139.93, and expansions off 139.93-132.90-137.03, 137.03-132.91-134.24, 134.24-130.89-132.82.
Supports:
- 130.75 = COP
- 130.12 = OP
- 130.00 = objective point (OP)
- 129.47 = OP
- 129.15 = .618 retracement
Overbought/Oversold
Assuming that the medium term trend is down it's preferable to open short positions when the Detrended Oscillator gets above the zero level (10-15 pips above the current prices) or into the overbought area (50-65 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.