With thin market conditions likely to persist until early Monday morning, price moves may be limited with the exception of a possible gap on the Sunday open from Saturday’s release of Chinese Manufacturing PMI. The bullish trend is very much valid and buying on dips will help maintain an aggressive risk/reward ratio.
Price action on the 15-minute chart above displays a potential bullish Gartley Pattern forming around the 166.50 level. That level is confirmed with the 70.7% Fibonacci retracement level of the X to A leg and the 161.8% Fibonacci expansion level of the B to C move.
If valid, traders may see a sharp rally targeting a potential double top pattern around the 167.80 area.
The trade: Buy GBP/JPY at 166.60 with a stop loss at 166.30 and a take profit at 167.50. The Risk/Reward Ratio is 1:3.
Edward J. Moya
WorldWideMarkets Online Trading