GBP/JPY is developing impulse wave A of medium term downtrend from 131.75 (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 also three subwaves (magenta in the chart), and impulse subwave C is developing from 129.51.

The targets below are Fibonacci expansions off 131.75-129.02-130.71, 130.71-128.34-129.51, 129.51-127.76-128.75.

Supports:

- 127.67 = contracted objective point (COP)
- 127.14 = objective point (OP)
- 127.00 = OP

If the price reverses to the upside the immediate resistances will be Fibonacci retracements of 130.71-127.76, 131.75-127.76.

Resistances:

- 128.89 = .382 retracement
- 129.24-28 = confluence area of .50 and .382 retracements
- 129.58 = .618 ret
- 129.76 = .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 (current prices) or into the overbought area (25-35 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.