GBP/JPY is developing corrective wave B of medium term uptrend from 127.04 (light green in the chart). Within this wave we have three subwaves (royal blue in the chart), and impulse subwave C is developing from 130.71. Within it there are two subwaves (magenta in the chart), and potential corrective subwave B is developing from 128.34.

The targets below are Fibonacci expansions off 131.75-129.02-130.71, 130.71-128.34-129.51, 129.51-128.57-129.04.

Supports:

- 128.46 = contracted objective point (COP)
- 128.10-128.05-127.98 = confluence area of two objective points (OP) and COP
- 127.52 = expanded objective point (XOP)
- 127.14 = OP

If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 130.71-128.34, 131.75-128.34.

Resistances:

- 129.53 = .50 retracement
- 129.64 = .382 ret
- 129.80 = .618 ret
- 130.05 = .50 ret

Overbought/Oversold

The bigger wave is now moving down, so it's preferable to try short positions when the Detrended Oscillator goes above the zero level (15-20 pips above the current prices) or into the overbought area (40-55 pips above the current prices). Watch for opportunities to go short at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.