GBP/JPY is developing potential impulse wave РЎ (colored royal blue in the chart) of medium term downtrend from 127.31. Within this wave there are A and B subwaves (colored magenta in the chart) with subwave B still developing from 124.47.
The targets of the downmove are Fibonacci retracements of 124.47-126.55, and expansions off 130.81-123.27-127.31, 127.31-124.47-126.55.
Supports:
- 125.76 = .382 retracement
- 125.51 = .50 ret
- 125.26 = .618 ret
- 124.79 = contracted objective point (COP)
- 123.71 = objective point (OP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 130.81-123.27, and expansions off 123.27-127.31-124.47, 124.47-125.78-125.41.
Resistances:
- 126.72 = OP
- 126.97 = COP
- 127.04 = .50 ret
- 127.53 = expanded objective point (XOP)
- 127.93 = .618 ret
- 128.51 = OP
Overbought/Oversold
Assuming that the major wave is down it's preferable to try short positions when the Detrended Oscillator gets above the zero level (15-25 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.