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 three subwaves (magenta in the chart), and potential impulse subwave C is developing from 121.85. Within the latter there are three subwaves (red in the chart) with impulse subwave C developing from 122.49.

The supports below are Fibonacci retracements of 118.74-124.28.

Supports:

- 122.16 = .382 retracement
- 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, 121.85-124.00-122.49.

- 124.64 = objective point (OP)
- 125.27-28 = confluence area of contracted objective point (COP) and .618 ret
- 125.97 = expanded objective point (XOP)

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 (5-10 pips below the current prices) or into the oversold area (40-55 pips below the current prices). Watch for opportunities to go long at or near the indicated supports.

Read more on how to trade with Fibonacci levels.