GBP/JPY has finished corrective subwave B from 128.19 to 130.82 (colored royal blue in the chart) that is part of impulse wave C of long term downtrend (from 132.30) - this one is light green in the chart. Now we have potential impulse wave C developing from 130.82 (colored royal blue). Within this wave there are A and B subwaves - colored red. Potential subwave C from 130.09 is still developing.
Now the targets of the downmove are Fibonacci retracements of 128.40-130.82, and expansions off 139.93-130.26-135.11, 135.11-129.74-132.30, 132.30-128.19-130.82, 130.82-128.95-130.09.
Supports:
- 128.93 = contracted objective point (COP)
- 128.28-22 = confluence area of COP and objective point (OP)
- 127.06 = expanded objective point (XOP)
- 126.93 = OP
- 126.71 = OP
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 130.82-128.95 and then 135.11-128.19.
Resistances:
- 130.11 = .618 ret
- 130.83 = .382 ret
- 131.65 = .50 ret
Overbought/Oversold
Assuming that the medium term trend is down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (10-15 pips above the current prices) or into the overbought area (45-60 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.