The GBP/JPY pair is now developing the impulse wave A of the medium term downtrend (royal blue in the chart) comprising the subwaves A, and B (magenta in the chart) that is developing from 126.48. The latter includes the subwaves A, B, and C (yellow in the chart); the subwave C is still developing from the point 126.84.
The upside targets are Fibonacci retracements 130.04-126.48, and expansions off 126.48-127.30-126.84.
Resistances:
- 128.17-26 = confluence area of expanded objective point (XOP) and .50 retracement
- 126.68 = .618 ret
- 128.99 = super expanded objective point (SXOP)
But if the price reverses to the downside, the immediate supports will be Fibonacci retracements of the wave up from 126.48. As this wave is not developed yet, the supports are not available.
Overbought/Oversold
The bigger wave is now moving down, so it is better to try the short positions when the Detrended Oscillator goes above the zero level (current prices) or into the oversold area (25-40 pips above the current prices). Mind the opportunities to open the short positions at or near the indicated resistances.
Read more on how to trade with Fibonacci levels.