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I’m back at it with this short Guppy play, and this time I waited for a pullback to hop in. But am I about to get caught up in a reversal?

Short GBP/JPY Idea

This pair is still cruising inside a descending channel on the 4-hour time frame and is testing the top. This happens to line up with an area of interest or former support-turned-resistance.

Truth be told, I already jumped in on that first bounce off the area of interest, so I’m slightly worried that this second test might be a breakout attempt.

GBP/JPY 4-hour Forex Chart
GBP/JPY 4-hour Forex Chart

At that time, EU Brexit chief negotiator Barnier seemed to brush off any optimism surrounding negotiations when he “strongly opposed” a number of points in PM May’s proposal. More recently, though, he appeared more flexible with a Brexit deal deadline so pound bulls are finding fresh hope.

The upcoming BOE decision might still draw bears out this week, especially since Governor Carney previously hinted that they could rethink their tightening timeline to account for a “no deal” situation. I’ll be keeping close tabs on this event for sure to see if I should cut my losses quick!

Here’s what I have for now:

Shorted GBP/JPY at 143.50, stop loss at 146.25, profit target at 136.25

My target is around the channel support and just above the 136.00 handle, and stop is just past the area of interest and channel top to allow me to get out once the tech setup is invalidated. Think this will work out in my favor?

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