GBP/JPY: Support Turned Resistance (October 17, 2013)

This is in line with a broken support level back in September and is also the 61.8% to 50% Fib levels on the 1-hour time frame. However, stochastic is not yet in the overbought zone, which means that pound bulls still have enough buying power.

A safer play might be to wait for a break below the recent consolidation, with a short order around the 38.2% Fib or lower. A more aggressive entry would be to short at market or at the 158.00 handle.

Aiming for the previous lows around 155.00 would yield a 1:1 to 3:1 reward on risk, depending on the entry levels. Setting a stop above the 158.00 mark or 61.8% Fib level would give the trade enough breathing room.

By Kate Curtis from Trader's Way