GBPJPY—triangle

GBPJPY dropped to a low of 138.26 before rising to a high of 139.93 this morning—not a great move up so further lows may be in store. However, I closed my short position from 144.00 for + 463 pips. On Friday, I had entered another one at 140.92. This one is currently at 165 pips profit.

On the one- and three-hour charts, you can see the pair is coiling in a small symmetrical triangle. A break below this would probably mean additional lows today. As I’ve written before, this pair had a confirmed double top in June and August and the price target from that pattern was 130.45. That would be pretty.

Support:

138.26 (today’s low)
137.58 (served as support several times in 2009)
135.72 (March ’09 low)
131.47 (March ’09 low—yes there were two lows in that month that could be supportive)

Resistance:

1.3993 (today’s high)
140.00 (psychological round number)
141.61 to 142.62 is possible (142.62 is the redrawn uptrend line)
143.07 (the February low before this debacle)
144.00/19 (round number and the original, broken downtrend line)

Here’s the one-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.