Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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The GBPJPY is up for the fifth straight session. Buyers have extended today’s rally above a key level that I’ve had my eye on since February.
The trend line that extends from the 2016 low broke down on February 28 and has been serving as resistance since that time. I’ve featured the level on this site several times since then, but buyers continue to press on.
For those interested in selling the GBPJPY, the pair has been stubborn, to say the least. Then again, if you have a bearish longer-term outlook, you could also view recent strength as a blessing. After all, the aim is to sell high, right?
However, the key is having the patience necessary to secure a proper entry at higher levels. I had entered short with a small position last week just above 151.00, but I’ve since closed it at breakeven.
For now, I’m just keeping an eye on things. I am still interested in getting short as long as the GBPJPY trades below former trend line support on a daily closing basis. Keep in mind that I use New York close charts, which are vital if you intend to trade this way.
If GBPJPY bulls manage to close the day above the trend line (currently 151.05), it will negate the bearish bias in the short-term. You could say that the 2016 trend line shown below is the “must hold” level for sellers.
In summary, I have no position at the moment, but I am watching to see how the pair reacts to the 2016 trend line on the daily chart. A sell signal would take us back to the 147.90 area followed by 145.85.
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