GBP/JPY is developing corrective wave B of medium term downtrend from 127.76 (light green in the chart). Within this wave we have two subwaves (red in the chart), and potential corrective subwave B is developing from 129.32.

Now the targets above are Fibonacci retracements of 130.71-127.76, 131.75-127.76, and expansions off 127.76-129.32-128.20.

Resistances:

- 129.16 = contracted objective point (COP)
- 129.58 = .618 retracement
- 129.76 = confluence area of .50 ret and objective point (OP)
- 130.23 = .618 ret

The targets below are Fibonacci expansions off 131.75-127.76-129.32, 130.71-127.76-129.32.

Supports:

- 127.50 = contracted objective point (COP)
- 126.85 = COP
- 126.37 = objective point (OP)

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 (5-10 pips above the current prices) or into the overbought area (35-45 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.