The GBP/JPY pair is developing a corrective wave B of the medium term uptrend from 127.04 (light green in the chart) including three subwaves (magenta in the chart) and an impulse subwave C developing from 130.71. Within this wave we can see three subwaves (red in the chart) and an impulse subwave C developing from 130.39.

The downside targets are Fibonacci expansions of 131.75-129.02-130.71, 130.71-129.42-130.39, 130.39-129.49-129.93.

Supports:

- 128.30 = expanded objective point (XOP)
- 127.98 = objective point (OP)
- 127.57 = super expanded objective point (SXOP)

If the price reverses to the upside, the immediate resistances will be Fibonacci retracements of the downside wave from 130.39 . As this wave has not developed yet, resistances are not available.

Overbought/Oversold

The bigger wave is now moving downside, 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.