Hey traders! Today we’re diving into a high-probability setup on the JPY/GBP pair with up to 22% upside on the monthly chart. I’ll cover the technicals, fundamentals, and exactly how to trade it.
📉 Chart pattern
Looking at the chart, we’ve got a textbook falling channel stretching back from mid-2020. This descending structure has been consistent, but right now, we’re testing the upper boundary - and that could signal a trend reversal is coming.
Momentum indicators back it up too. The RSI is rising off oversold levels, sitting around 41. And check out the MACD: bearish momentum is fading. Classic setup for a bullish breakout.
📌 Trade setup
Wait for a monthly close above the upper channel, ideally between 0.00530 to 0.00535. That’s your breakout confirmation. You can place a buy stop just above the breakout zone.
Set your stop-loss below the recent swing low - about 0.00490 - to protect against false moves.
Now for the profit targets:
* First target: 0.00580, that’s 12% above current levels.
* Second target: 0.00630, that's 22% upside potential.
That gives you a potential risk-reward ratio of up to 1:4 - solid.
🌐 Fundamentals
On the macro side, this setup makes even more sense. Japan is finally stepping away from ultra-loose monetary policy, possibly hiking rates. Meanwhile, the UK looks set to pause or even cut rates in 2025. That shift could give the Yen the edge over the Pound, driving this move higher.
🛎️ Now, smash that like button if you found this helpful, and subscribe for more trade ideas.
📉 Chart pattern
Looking at the chart, we’ve got a textbook falling channel stretching back from mid-2020. This descending structure has been consistent, but right now, we’re testing the upper boundary - and that could signal a trend reversal is coming.
Momentum indicators back it up too. The RSI is rising off oversold levels, sitting around 41. And check out the MACD: bearish momentum is fading. Classic setup for a bullish breakout.
📌 Trade setup
Wait for a monthly close above the upper channel, ideally between 0.00530 to 0.00535. That’s your breakout confirmation. You can place a buy stop just above the breakout zone.
Set your stop-loss below the recent swing low - about 0.00490 - to protect against false moves.
Now for the profit targets:
* First target: 0.00580, that’s 12% above current levels.
* Second target: 0.00630, that's 22% upside potential.
That gives you a potential risk-reward ratio of up to 1:4 - solid.
🌐 Fundamentals
On the macro side, this setup makes even more sense. Japan is finally stepping away from ultra-loose monetary policy, possibly hiking rates. Meanwhile, the UK looks set to pause or even cut rates in 2025. That shift could give the Yen the edge over the Pound, driving this move higher.
🛎️ Now, smash that like button if you found this helpful, and subscribe for more trade ideas.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.