GBPJPY—battering at 138.14

Acting like one of those inflatable punching clown bags, GBPJPY looks again to be headed back to test yesterday's highs of 138.14. GBPJPY bulls tried repeatedly yesterday to push above there but ended up dropping down instead to 137.07. That drop might have provided the necessary energy. Its high so far (as of 8:07AM EST) is 137.89. If it does get through, it has additional resistance at 138.52/61 and strong resistance at 138.96.

Gann wrote that once a pair has tried three or four times at a level it will probably break through. If you count the repeated tries yesterday as one try then shorting would seem safe enough and you could set a tight stop. You'd need to be ready to reverse. It's going to require watching price and momentum carefully.

My last long at 137.44 profit stopped out yesterday at 137.60 for +16 pips.

Support is at 137.07, 136.92, 136.55, 135.19, 134.53 (strong), 133.93/78, and 132.03. Resistance is at 138.14, 138.52/61, 138.96 (strong), 139.58 (strong), 140.57, and 142.64.

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.