GBPJPY Distribution Before Next Expansion

Pair: GBPJPY may find key levels of support before the next expansion.


Key Points:

  • Price holding above the 200 EMA which it may revert towards
  • Price holding below the 50 EMA
  • Short term trend line breached and holding below
  • Fibonacci 50% meets with major price 141.400 – Acting as a target or magnet
  • Must watch price around the 200 EMA
  • RSI has room to fall into oversold territory

Key Levels:
Support – 141.400, 141.00, 200 EMA
Resistance – 142.200, Trend line retest
Entry Zone:
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 142.200
Supporting Entry – 142.00
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 level 142.380 and violates – 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 142.200 – Target 1 141.400 = 5x Reward to Risk
Optimal Entry 142.200 – Target 2 141.000 = 7x Reward to Risk
Supporting Entry 142.00 – Target 1 141.400 = 1.3x Reward to Risk
Supporting Entry 142.00– Target 2 141.000 = 2x Reward to Risk
 

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