Market Condition: GBP/JPY Pending Daily Breakout
Target 1: 1X Reference 391 Pips
Target 2: 2x Reference 782 Pips
Invalidation: Continued Consolidation
(Created using Marketscope 2.0 Charts)
After declining to a new monthly low earlier in the week, the GBP/JPY is now consolidating with a series of inside bars. Using Wednesdays daily high as a reference, resistance for the pair is currently found at 132.51. Support may be found at Wednesdays low at a price of 128.60. Traders may reference these values, and continue to monitor market conditions for a breakout either above resistance or below support.
Traders should note that Wednesday’s reference bar measures 391 pips. Traders may use a 1X extension to find initial profit targets. Half of this range, 195 pips, may be used for stop placement. This creates a 1:2 Risk/Reward ratio for an attempted breakout.
In the event that prices fail to breakout, traders may elect to trade the continued consolidation between the previously mentioned values of support and resistance.
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