The GBP/JPY pair is developing an impulse wave A of the medium term uptrend from 127.04 (light green in the chart). Within this wave we have two subwaves (red in the chart), and potential corrective subwave B developing from 131.73.
The downside targets are Fibonacci retracements of 127.04-131.73 and expansions of131.73-130.14-130.92.
Supports:
- 129.94 = .382 retracement and contracted objective point (COP)
- 129.38-33 = .50 ret and objective point (OP)
- 128.83 = .618 ret
- 128.35 = expanded objective point (XOP)
If the price reverses to the upside, the immediate resistances will be Fibonacci expansions of 127.04-131.73-130.14.
Resistances:
- 133.04 = COP
- 134.83 = OP
Overbought/Oversold
The bigger wave is now moving up, so it is preferable to try long positions when the Detrended Oscillator goes below the zero level (current prices) or into the oversold area (25-35 pips below the current prices). Consider the opportunities to go long at or near the indicated supports.
Read more on how to trade with Fibonacci levels.
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