Tonight I feel that going long from around the 131.00 level is the safest bet, so I will be placing a buy GBP/JPY order @ 131.10 with my TP 131.69 and SL 130.60. The reasons for going long are:
1. 131.20 - 131.00 has what looks to be like a major trendline support on the 4 hour chart.
2. The RSI is looking oversold on the 15 min - 4 hour charts and is showing an inverted H&S pattern on the 30 minute chart.
3. Decent resistance is at 131.70 and may have to be tested before another leg down so I am guessing that this test may come in the next few hours.
4. Price action is suggesting that the bears are losing momentum in the short term and a short squeeze is in the works. If 131.00 does not hold the next major support is around 130.30 which seems unreachable from where we sit, but anything is possible in forex so I guess we'll have to wait and see.
P/L RESULTS = + 55 pips
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