GBP/JPY is developing impulse wave C of medium term downtrend from 129.32 (light green in the chart). Within this wave we have two subwaves (royal blue in the chart), and potential corrective subwave B is moving from 118.74. Within this wave we also have two subwaves (magenta in the chart), and potential corrective subwave B is developing from 124.28.

The supports below are Fibonacci retracements of 118.74-124.28.

Supports:

- 121.51 = .50 retracement
- 120.86 = .618 ret

However if the price reverses to the upside the immediate resistances will be Fibonacci retracements of 129.33-118.74, and expansions off 118.74-124.28-121.85.

- 125.27-28 = confluence area of contracted objective point (COP) and .618 ret

Overbought/Oversold

The bigger wave is now moving up, so it's preferable to try long positions when the Detrended Oscillator goes below the zero level (current prices) or into the oversold area (30-45 pips below the current prices). Watch for opportunities to go long at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.