GBP/JPY major reversal signal at 61.8%
GBP/JPY daily chart pulling back to 61.8% Fibonacci retracement along with bullish hammer outside Bollinger band.
GBP/JPY price hovering below the 50 EMA and trend line making its 4th attempt to slice through to commence the new trend. Flags, triangles, or pendants may form above the trend line for further confirmation.
- Daily – Possible bullish hammer
- Daily – Price tags lower Bollinger Band
- Daily – 61.8% Fibonacci retracement
- Price holding below the 200 EMA
- Price holding below the 50 EMA
- RSI cutting through 50 mid-point
Support – 134.850
Resistance – 50 EMA, 200 EMA, 136.290, 137.000
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 135.200
Supporting Entry – 135.400 (breaks trend line)
Candle Reversals for entry
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 134.619 – 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 135.200 – Target 1 136.290 = 2x Reward to Risk
Optimal Entry 135.200 – Target 2 137.000 = 3x Reward to Risk
Supporting Entry 135.400 – Target 1 136.290 = 1.2x Reward to Risk
Supporting Entry 135.400 – Target 2 137.000 = 2x Reward to Risk