GBPJPY—rallying

The pair appears to have found support at 143.00, a round number and prior support. I took additional profit from my short from144.72 at +112 pips. It touched 143.94 this morning, fell back, and has now reached a high, so far, of 144.04 so it's possible it will return to the 145 area. Successfully clearing and closing above 144.10 on the hourly chart will make this more likely. I'll probably try another short at 144.97.

You can sometimes guage the potential behavior of this pair by assessing risk averion. If there's greater appetite for risk then this pair often rises. Looking at the USD index can sometimes give a clue but it's a mixed bag this morning. The USD index closed lower Friday for the second consecutive day but is higher this morning, no doubt because of concern over whether the Greek rescue package will be sufficient and whether Spain will be able to lower its deficit given its high unemployment rate. However, there is still bearish sentiment for the USD.

Support is at 143.00, 142.82, 142.21, 141.60 and 140.28. Resistance is at 144.10, 144.32, 145.02, 145.22/30, 145.54 and 145.98.

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.