In the last weeks the JPY crosses have been trading in a pretty wide range, the GBPJPY for instance went from around 150.35 to around 139.79 to 148.20 and right now it is trading at 142.55, this is more than 2,500 in a little more than 3 weeks. These are the swings that we need to stalk:
Right now the GBPJPY is trading around the LT support level of 142.62, in the short term charts this zone accounts for: 144.02 and 142.17 (quite large short term range). So right now I’m waiting for the market to break that range before starting to look for a trade opportunity.
So here is my Trading Plan:
If the Pound-yen breaks the 144.02 ST resistance level, I will be looking for long trade opportunities.
If the GBPJPY breaks the 142.14 ST support level, I will be looking for short trade opportunities.
If it continues to trade in the ST range I will do nothing.
It appears that the market is reacting now, most pairs are trading in a clear market condition (finally after two weeks of very few opportunities) and there are good opportunities in some pairs and crosses.
However, there is one cross that continues to trade in a undefined range (the most difficult market condition to trade since we have no clear support or resistance levels), and it is the GBPJPY.
I know many traders like the GBPJPY because it moves pretty fast and the average daily range is greater than most currency pairs, but these weeks have been difficult to find any opportunity in this one, just take a look at the next chart:
This one has no clear support or resistance levels, the GBPJPY stalled around 150ish, so the best thing to do here would be to wait for the market to break the range before looking for any trade.
You must think I’m crazy because I’m looking for a trading opportunity in the GBPJPY after last Friday movements. But you know, it was different in the GBPJPY, movements were clearer and it retraced exactly at long term important levels, so it is probably a good idea to look for a trading opportunity here.
Anyway, the GBPJPY was rejected from an important long term support level and now it is trading in a bullish market condition.
My Trading Plan
As long as the Pound-Yen continues to trade above 150.20 I will be looking for long trading opportunities. All TP orders will be placed around the next resistance level at 153.13
In the last weeks the GBPJPY has been trading smoothly in between long term support and resistance levels, making it easy to find trades in between those levels. Right now, it is trading in a range in between 143.86 and 140.77, take a look at the next chart:
We need to wait for the short term confirmation before we start looking for a trading opportunity in the GBPJPY.
Here is my Trading Plan:
If the market breaks the 143.89 for the upside, that means that the GBPJPY broke that range for the upside and we should be looking for long trading opportunities. If this happens, I will be looking to take profits below the next long term resistance level at 148.75
If the GBPJPY breaks the 143.18 level for the downside, it means that it will continue to trade in the 4H range and only short opportunities will be in play. If this happens, I will be looking to take profits above the next long term support level at 140.77
If the market keeps trading in between 143.89 and 143.18 I will do nothing.
Today is announced probably the most important news event in the forex market, the interest rate announcement from the FED. So we need to be careful, although no interest rate change is expected later today, traders and investors will focus in the tone of the speech: hawkish, etc. So we still could have some impact and wild swings.
Technically speaking, the GBPJPY is in a bullish market condition, it bounced off an important support level, please take a look at the next chart:
I know, a lot of us were expecting the market to brake the long term support level and validate the daily double top, but I guess the GBPJPY is not ready for that yet. Instead, it was rejected from that support level around 149.11, so, we need to look for long trading opportunities.
My Trading Plan:
As long as the market keeps trading above 149.37 I will be looking for long trading opportunities. All my TP orders will be set at 152.38. Remember: no trades before the interest rate announcement.
The GBPJPY is trading at an important long term resistance level around 159.45, in the short term charts it is trading in a tight range in between 159.79 and 158.23, so it first need to clear either support or resistance to start looking for trading opportunities, please take a look at the next chart:
My Trading Plan:
If the market breaks the 159.79 short term resistance line, I will be looking for long opportunities. All take profit orders will be placed around 161.70
If the market breaks the 158.23 short term support level, I will be looking for short trading opportunities. All take profit orders will be placed around 157.00
If the market keeps trading in the short term range I will do nothing.
The cross GBPJPY is getting closer to a few trading setups, but first, the market needs to break important short term support or resistance levels. Please take a look at the chart below.
My Trading Plan:
If the market breaks the short term resistance level around 156.74 (green resistance line), I will start to look for long opportunities, and all take profit levels will be placed below the long term resistance around 159.45
If the market breaks the short term support level around 154.87 (green support line), I will start to look only for short trading opportunities (will validate the head & shoulders pattern), and all take profit orders will be placed around 150.00