GBP/JPY testing 50 periods EMA – Is it good time to go long?

The market is a bit muted at the moment as the traders are saving their bets for the FOMC meeting and the Fed Fund Rate. However, the team FX Leaders managed to grab green pips in GBP/JPY earlier today. The Japanese Yen weakened after the Bank of Japan reported a slower inflation. The CPI rose at a 0.5% rate vs. 0.6% forecast, which caused a slight bearish impact on the safe haven currency.

What’s next?

The GBP/JPY is testing the 20 and 50 periods EMA at 148.350 and that’s exactly the level where we close our selling trade today. The RSI is trading below 20, signifying that the market is oversold. It means that the sellers may get exhausted soon and we may see bulls entering the market. The GBP/JPY has also formed a tweezers bottom pattern at 148.350 support which typically causes a bullish reversal in the market.

Speaking about the trading levels, the pair has a significant support at 148.350 and we may see a bullish reversal above it. Whereas, the bearish breakout of this level may cause further selling until 147.750.

Support Resistance
148.12 149.34
147.36 149.79
146.15 151
Key Trading Level: 148.57

GBP/JPY – Trade Plan

The idea is to open a sell position below 148.300 with a stop above 148.650 and take profit at 147.800. Good luck!