It’s possible it’s returning to the triangle it fell from last week. That price is at 147.92.
GBPJPY, along with EURJPY, has been in a sideways range for much of 2009. This range is 139.03 to 163.09 although it hasn’t seen those highs since August of last year. There was also a confirmed double top (162.60/163.09) in June and August and the pair broke the trough at 146.77, dropping to a low of 139.71. The price target from that pattern was 130.45 (Peak to trough subtracted from trough or (146.77 – (163.09 – 146.77)). Then the triangle came along where it loitered since early January before dipping down to a low of 144.93 last week. The high as of now (12:25 PM EST) is 146.60.
I plan to enter another short position if it gets near the triangle although it has 130 pips to go before it gets there. However, this pair is more than capable of making that move. As always, it will depend on price action at the time. Two other possibilities for shorting are the Fib retracement levels of 146.86 and 147.35. Any entry requires tight stops.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
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