Longterm GBPY Long + Short Setup on 4H + 1D Charts 300-900 pips!Hope you all had a great weekend. Looks like our active trades are making great progress to start the week, so let's try to keep the momentum going!
The GBPJPY pair has been up trending on the Weekly chart since 3rd October 2016 and we can see price has touched down on the lower uptrend level a few times since then and has respected this trend line. Most recently we have come back down to this trend line and almost touched it today and so, we are expecting price to respect the trend line and bounce back up to continue it's trend pattern. On the weekly chart we can also see price hit a major resistance level on 12th of December 2016 and the 8th of May 2017 and was unable to break through, therefore our target TP will be just below this level with a return of 700 pips.
As we zoom into the daily + 4H charts, there is still some momentum to move down a little further. On the last two bounces, price was at 5% and 3% oversold on the daily chart and we only dropped to these levels when price touched the trend line and bounced up - Currently, price is 27% oversold so this would go in hand with our opinion that there is room to move down further before the bounce.
I have marked out some key support/resistance levels I want to keep an eye on as we monitor this trade setup. The conservative approach would be to wait for the bounce and enter above 141.3x for confirmation, however, I may just wait for the bounce and try to get in as low as possible and then keep a close eye on it.
On the flip side, with everything that is happening fundamentally... it is highly likely that the GBP will continue to fall and we may just see this pair break the trend line. I have marked out my potential targets for TP if we enter a sell instead of a long.
This research is for informational purposes and should not be construed as personal advice. Trading any financial market involves risk. Trading on leverage involves risk of losses greater than deposits.
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