Tonight I will place a sell order for GBP/JPY @ 131.60 with TP 130.85 and SL 132.15.
I expected for a good bounce from the 127.80 zone but nearly 400 pips is just nuts. Frankly I think this rally is overdone and a correction is now in play at least to the 23.6 Fibonacci level around 130.70. Tonight I will sell because:
1. The bounce from 127.80 has been extremely sharp, Profit taking and new shorts should provide decent resistance above 131.75 which is why my stop is in the 132.00 area. A break could mean 133.00 in a heartbeat.
2. RSI on 5 min- 4 hour charts is overbought meaning a reversal of some sort should be close by.
3. Although the 100 EMA has been smashed on all the charts from 5 min to 4 hour, it seems to have traveled to far from the price on the 1 chart which is why I prefer to play the reversion to mean card from these levels.
4. A trend line coming in at 131.30 has been breached but just by a hair. I feel the may drop back below it before making another jump.
[RESULTS ARE ALWAYS POSTED IN COMMENTS SECTION THE NEXT DAY]
P/L RESULTS = -55 pips
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