GBP/JPY is developing corrective wave B (colored light green in the chart) of medium term downtrend from 119.31. Within this wave there are A and B subwaves (colored royal blue in the chart), with subwave B still developing from 122.64. The immediate supports are Fibonacci retracements of 119.31-122.64, and expansions off 122.64-120.86-122.17, 122.17-120.65-121.73.
Supports:
- 120.79 = contracted objective point (COP)
- 120.58 = .618 ret
- 120.39 = objective point (OP)
- 120.21 = OP
- 119.29-27 = confluence area of two expanded objective points (XOP)
If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 127.25-119.31, and expansions off 119.31-122.64-120.65, 120.65-121.73-121.25.
Resistances:
- 121.92 = contracted objective point (COP)
- 122.33 = objective point (OP)
- 122.71 = COP
- 123.00 = expanded objective point (XOP)
- 123.28 = .50 ret
Overbought/Oversold
Assuming that the major wave is now up it's preferable to try long positions when the Detrended Oscillator gets below the zero level (10-15 pips below the current prices) or into the oversold area (40-55 pips below the current prices), watch for long trades at the specified supports.
Read more on how to apply Fibonacci studies to calculate price targets.