GBPJPY—finally finished correcting?

The correction took out my last short position from 140.92 for + 69 pips. The pair reached a high of 1.4144 yesterday before falling back. I entered short at 140.85 and the pair is currently in profit. I had thought the pair might reach above 141.61 but it looks as though 1.4144 might have capped the correction. Of course, I could be proven wrong. The uptrend line from last week's low is coming in at 139.29. It could bounce off it again. I've been writing for a couple of weeks at least that this pair hasn't fulfilled its price target (130.45) from the confirmed double top in June and August so there's still good potential for the downside if the trend resumes. On the other hand, GBPJPY spent most of last year in a range of 139.03 to 163.09 so it may be trying to find energy to scoot (or saunter) back to the top of its range.

Support

140.00 (round number)
139.43 (short-term uptrend line)
139.29 (yesterday's low)
138.26 (Monday's low)
137.58 (support from 2009)
135.72 (Mar '09 low)

Resistance:

141.44 (yesterday's high--141.42 was it for today and 141.43 was Feb 4th high)
141.50 to 142.50 (fib confluence zone)
143.07 (February low)
144.00 (round number)
144.50 (original broken uptrend line from Jan '09 and downtrend line from Jan)

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.