The GBP/JPY pair is developing an impulse wave C of the medium term downtrend from 129.32 (light green in the chart) including three subwaves (magenta in the chart) and an impulse subwave C developing from 126.39. Within this wave we also have four subwaves (red in the chart) and potential corrective subwave 4 developing from 118.74.
Presently the downside targets are Fibonacci expansions of 129.33-124.59-126.39, 126.39-124.08-125.03, 125.03-118.74-120.77.
Supports:
- 118.72 = expanded objective point (XOP)
- 116.88 = contracted objective point (COP)
If the price reverses to the upside, the immediate resistances will be Fibonacci retracements of 125.03-118.74.
Resistances:
- 121.14 = .382 retracement
- 121.88 = .50 ret
- 122.63 = .618 ret
Overbought/Oversold
The bigger wave is now moving downwards, so it is preferable to try short positions when the Detrended Oscillator goes above the zero level (current prices) or into the overbought area (20-35 pips above the current prices). Consider the opportunities to go short at or near the indicated resistances.
Read more on how to trade with Fibonacci levels.
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