Daily chart showcasing major support at 135.500 from historical points of resistance and now support. GBP/JPY sideways trending since the 10^th of September in a tight range with what looks to be a stop hunt spew below, and full recovery back within the base.

GBP/JPY –

The great thing about these bases are the entry and exits are defined. Entry at the base and you know if it fails support, its most likely falling past the stop hunt low.

Key Points:

• Price holding below the 200 EMA
• Price hugging above the 50 EMA
• Daily Chart – Price at 61.8% Fibonacci support (June low – September High)
• Fibonacci 61.8% clusters with 135.500 showing further strength.
• RSI could break trend and range simultaneously for momentum
• Accumulation at the low of the base would need to be observed at the high of the base. A clean close above, and it should have legs to find 139.500

Key Levels:
Support – 135.500, 50 EMA
Resistance – 136.500, 200 EMA, 138.400, 139.500
Entry Zone:
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 135.700
Supporting Entry – 135.900
Candle Reversals for entry

• Bullish Hammer
• Bullish Engulfing
• Bullish Piercing

 
The Risk:
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
IF: Price breaks below 134.950– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
Reward / Reward Targets:
Optimal Entry 135.700 – Target 1 138.400 = 3.5x Reward to Risk
Optimal Entry 135.700 – Target 2 139.500 = 5x Reward to Risk
Supporting Entry 135.900 – Target 1 138.400 = 3.5x Reward to Risk
Supporting Entry 135.900 – Target 2 139.500 = 2.5x Reward to Risk