GBP/JPY up 3.5% from September lows with average volume declining at higher highs.

The trend channel higher band also clustering with 50% Fibonacci level and an overthrow in price may even se 61.8%.

When approaching the zone, it is crucial to wait for a key bearish candle reversal signal with supporting volume to execute GBP/JPY to target 1 or lower band of the channel. Any major changes in price behaviour should trigger signals to move the stop to break even and take partial position.

 
Key Points:

• Caution – Price holding above the 200 EMA
• Caution – Price holding above the 50 EMA
• Fibonacci 50% clusters with round number 138.000
• Average volume dropping at higher highs

 
 
Key Levels:
Support – 50 EMA, 200 EMA, 136.650, 135.770
Resistance – 138.000, 138.400
 
Entry Zone:
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 138.400
Supporting Entry – 138.000
 
Candle Reversals for entry

• Bearish Shooting Star
• Bearish Engulfing
• Bearish Dark Cloud Cover

 
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 above 139.25– 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 138.400 – Target 1 136.650 = 2x Reward to Risk
Optimal Entry 138.400 – Target 2 135.770 = 3x Reward to Risk
Supporting Entry 138.000 – Target 1 136.650 = 1x Reward to Risk
Supporting Entry 138.000 – Target 2 135.770 = 1.7x Reward to Risk