GBPJPY—reversed again

This pair, too, is in an upward channel that's a bear flag on the daily chart. The range of that channel appears to be contracting. My short position from 136.58 profit stopped out at +28 pips. When I woke up this morning, I'd missed the low of 135.19 from overnight. However, it looked like a definitive bounce so I went long at 136.40. I'm currently at breakeven with my stop.

While the top of the range is 138.16 (where the pair will find formidable resistance), I actually have potential profit targets for this pair at 145.50/90. That's not to say it will make it, of course. It just hints at possibilities. There is some negative divergence showing up from last week on the three-hour chart so it won't be a straight, easy ride if it does happen. If I'm stopped, I'll probably try again as long as price stays inside the channel.

Resistance is at 137.00 (where it's currently hovering), 138.09/26 (strong), and 140.00. Support is at 136.00, 135.52/45, 135.19, 134.93, 134.00, and 133.92.

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.