GBPJPY: Resistance under 196.00 yesterday hit under line parallel to bullish channel and pull-back followed to 193.45 today
The daily candle chart below shows the medium term price history of the Great British Pound (GBP) versus the Japanese Yen (JPY). This currency pair is known as GBPJPY, and is trading near 194.44 after falling from yesterday's high under 196.00 to 193.45 today.
In the last post about GBJPY in Ideas You Can Trade last week, the momentum was very bullish and a resistance line had been drawn above the overall bullish channel (parallel to the upper line of the channel). That line appears to have reversed the steep trend and coincided just under 196.00 and area that failed to be reach both last week and yesterday.
If the bullish momentum resumes then support should be found above today's low, and a bullish continuation to retest under 196.00 remains the barrier to further upside. Whereas, considering the overall bullish channel formation, trend do tend to reverse at either end of the channel, and therefore the pair remains at a crossroads with high-volatility possible.
Below area examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 195.01 with a Limit to take profit @ 195.99 and a stop-loss @ 194.09 Risk/Reward Summary: Limit risk = +98 pips profit / (-92) Stop-loss risk = Gain to Loss ratio = 1.06
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 193.44 with a Limit to take profit @ 192.79 and a stop-loss @ 193.99 Risk/Reward Summary: Limit risk = +65 pips profit / (-55) stop-loss risk = Gain to Loss Ratio = 1.18
Medium term daily candle chart:
Longer term weekly candle chart: