GBP/JPY is hanging, or better resting, on a very thin level of intermediate support formed by a minor bullish trend line currently. However, looking how close price came to closing the gap between 142.20 to 142.60 at the end of May, 2018, it seems very likely that it will now close this gap. The reason why I believe it will, is because after price closed below the second speed resistance trend line it got rejected twice when it re-tested it, and above the 100 & 200 SMA have made a bearish cross over, thus, indicating bearish momentum.
Whether we will see a 100% retracement back to 135.60 depends on what happens around the 142.00 level. If it holds then obviously new highs could be formed after a close above 156.00, if the 142.00 level does not hold the last chance for the bullish trend to remain intact is if the 138.80 level holds, which is approximately the level of the bullish 100 & 200 SMA cross over.
Keep a close eye on USD/JPY, if it continues its short term bearish correction expect GBP/JPY to continue dropping as well.
Trade short 1 (RvR ratio 2:1) Entry: Close below 144.35 S/L: 145.42 T/P: 142.20
Trade short 2 (RvR ratio 2:1) Entry: Close below 142.20 S/L: 143.88 T/P: 138.84
As always, scale out your profits and adjust stop/loss to suit your personal risk management profile.
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