GBPJPY—taking its time

As I wrote last week, Guppy broke above strong resistance, a long-term downtrend line on the weekly chart. In order for this to mean something more than what it is, it must close above the 134.23 November high. Last week it touched 132.58 and sprung back as though shot, immediately retracing almost the entire move up from 128.70, dropping to 128.82 on Friday. Late yesterday it touched 132.00 for about three minutes before falling back again. I bought yesterday at 130.65 after the pair missed my buy order at 129.55. Obviously, I'm at better than breakeven but the pair needs to get moving.

On the daily chart below, it's peeking above the daily downtrend line from this past August. Troubling signs are the long upper shadow on the circled candle which hints that it's rejecting higher prices right at confluence and the two long bearish candles the last few days. The most recent price action on the three-hour chart (not shown) is forming into an ascending triangle. Ascending triangles typically break upwards.

If it does break upwards then resistance is at 132.58, 133.00, 134.23, 135.22, 136.24, and 137.79. After that there is very little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.

Support is at 129.50, 128.99, 127.50, 126.73/46 and 125.55.

Here's the daily chart:












© Dianne Fecteau, 2011. 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.