Here’s a technical play on GBP/JPY. We seen lower highs on the 4hr chart and resistance at 235.35, which the pair is currently trading above. This is forming a descending triangle, in which i think is coming close to completion before we see a breakout. It’s not ready for a breakout yet, but I think the pair will continue to find support at 235.35 and rally from there.
Stochastics are in the oversold area, but RSI hasn’t reached below 25 yet, so we will wait and go long at 235.40. If the pair breaks below the support area we will close any open long positioins and go short.
Because of the wide ranges this pair trades on a daily basis, I will definitely lower my normal position sizes to weather any wide swings. Remember to not risk more than 1% of your account on any trade. Here’s our trade idea:
Long GBP/JPY at 235.40, stop at 234.90, pt1 at 236.10, pt2 at 236.50
Good luck and good trading!