GBPJPY—at top of channel

My long position profit stopped out at 137.87 for +104 pips. The pair is now at the top of a small channel. I just took a short position at 137.96. However, I'm more than ready to stop and reverse in the somewhat tricky trading market of the last couple of days.

This small channel is within a much larger channel whose range is 136.00 to 139.73. It's possible to interpret the smaller channel as a bull flag—if so, the target would be 142.20. Since that coincides with a resistance level identified prior to this at 142.10, it's not completely out of the realm of possibility. However, before that becomes something to seriously consider it must clear yesterday's high of 139.07.

Resistance is at 138.09/18, 138.58, 139.07, 139.75, 141.40, 142.10, and 143.65. Support is at 137.03, 136.00, 135.52/45, 135.19, 134.93, and 134.00.

Here's the hourly 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.