The GBP/JPY is trapped between EMAs

The moving averages could act as levels of resistance or support and in certain occasions the price of an instrument may get trapped between two moving averages, bouncing from one to the other. On the daily chart of the GBP/JPY we can see that the price of the pair has been stuck between the 200 day EMA (blue line) and the 55 day EMA (purple line). The range between the two EMAs goes from the 141.74 to the 143.00. When that ranges is wide enough, one could trade inside it, buying at the support and selling at the resistance. However, if the range is too tight or if one doesn´t want to take any chances by getting caught on the wrong side of the market in case of a breakout, we can wait for a breakout before taking a position. If the price breaks to the upside, then the next resistance level above the 143.00 zone is the 145.00 level. Below the 200 day EMA or the 141.74 level, the next support levels could be the 140.00 level followed by the 139.00 level.