The GBP/JPY pair is developing an impulse wave C of the medium term downtrend from 129.32 (light green in the chart). Within this wave we have three subwaves (magenta in the chart) and an impulse subwave C is developing from 126.39. Within this wave we also have three subwaves (red in the chart) including impulse subwave C developing from 125.03.

Presently the downside targets are Fibonacci expansions of 131.75-127.76-129.33, 129.33-124.59-126.39, 126.39-124.08-125.03, 125.03-124.33-124.92.

Supports:

- 121.65 = objective point (OP)
- 121.29 = expanded objective point (XOP)

If the price reverses to the upside, the immediate resistances will be Fibonacci retracements of 125.03-121.71.

Resistances:

- 122.98 = .382 retracement
- 123.37 = .50 ret
= 123.76 = .618 ret

Overbought/Oversold

The bigger wave is now moving downwards, so it is preferable to try short positions when the Detrended Oscillator goes above the zero level (current prices) or into the overbought area (current prices as well). Consider the opportunities to go short at or near the indicated resistances.

Read more on how to trade with Fibonacci levels.