GBP/JPY is developing impulse wave РЎ (colored royal blue in the chart) of medium term downtrend from 126.55. Within this wave there are A, B and C subwaves (colored magenta in the chart) with subwave C still developing from 125.05.
The targets of the downmove are Fibonacci expansions off 130.81-123.27-127.31, 127.31-124.47-126.55, 126.55-123.36-125.05, 125.05-123.04-123.93.
Supports:
- 123.08 = contracted objective point (COP), already hit (!)
- 122.69-65 = confluence area of two COP's
- 121.95-92-86 = confluence area of expanded objective point (XOP) and two objective points (OP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 125.05-123.04.
Resistances:
- 124.05 = .50 ret
- 124.28 = .618 ret
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 (10-15 pips above the current prices) or into the overbought area (40-50 pips above the current prices).
Read more on how to apply Fibonacci studies to calculate price targets.