After learning that the BOJ was selling JPY last night it's clear why none of the technical levels held there own. Now that we are nearly 500 pips from where we were on Monday, the break lower that was witnessed at 129.00 means a lot less. By where we sit now I feel that a cautious sell is the way to go . I will place an order to sell GBP/JPY @ 133.74(pending) with TP 132.65 annd SL 134. 30. Here's why:
1.After breaking 129.70 and 131.60 it clear that the immediate momentum has shifted upward. With the price sitting comfortably above the 100 EMA on 30 min - 4 hour charts it seems like the skies the limit, but is it? The break higher was clearly based on fundamental factors (Government Intervention in this case). Now that these factors look to have subsided for now I think the price will return to it's natural course fairly soon.
2. The daily 100 EMA at 133 65 hasn't been breached and could be all that is needed to bring about a dip as long as we don't close above it in the next few hours.
3. The RSI is reading Overbought on the daily chart but oversold on 5 min to 1 hour chart. This indicates that although the move up is near the ceiling, there might another jump to see if the highs can be broken. I'm betting they can't.
4. The 61.8 Fibonacci level sits at 134.00 after falling nearly 100 pips already from 134.00 it looks like this level combined with the 100 day EMA could be enough to cap the rally for now.
EDITED @ 22:35 PST
CHECK COMMENTS TOMORROW TO FIND OUT RESULTS
P/L RESULTS = - 55 pips
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