GBPJPY—drop below short-term uptrend line

This pair just dropped to a low of 134.72, suggesting that it's going to be difficult for any kind of serious rally to take place. I just took partial profits on my short from 137.96 at +309 pips. Shorting rallies is the best approach, especially since the weekly chart shows the long term uptrend line coming in at 134.30. However a clean break below that line would hint much lower lows are in store. Keep the weekly chart in mind while trading shorter time frames.

Resistance is in narrow increments at 1.3562, 1.3596, 136.20, 136.50, 137.00, 137.50 and 137.95. Support is at 134.30, 133.93 and 132.03.

Here's the weekly chart. My short doesn't show on this chart because I use a different charting package for longer-term charts.












© 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.