GBP/JPY is developing corrective wave agains the whole downwave from 127.25 to 117.22. According to wave count we have A, B and C waves of medium term uptrend (colored red in the chart), and inpulse wave C is still developing from 117.49. Within this wave there are four subwaves (colored red in the chart), and potential corrective subwave 4 is still developing from 119.66.
The targets above are Fibonacci retracements of 127.25-117.22, 122.71-117.22, expansions off 117.22-118.21-117.49, 117.49-118.58-118.25.
Resistances:
- 119.97 = .50 retracement
- 120.01 = expanded objective point (XOP)
- 120.08 = super expanded objective point (SXOP)
- 120.61 = .618 ret
- 121.05-10 = confluence area of .382 ret and SXOP
If the price reverses to the downside the immediate supports will be Fibonacci retracements of 117.22-119.66, 117.49-119.66, and 118.25-119.66.
Supports:
- 119.12 = .382 ret
- 118.96 = .50 ret
- 118.83-79 = .382 and .618 ret
- 118.73 = .382 ret
- etc.
Overbought/Oversold
The bigger wave is now moving up, therefore 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 (20-25 pips below the current prices). Watch for entries long at or near the indicated Fibonacci supports.
Read more on how to trade with Fibonacci levels.