Today I’m going to show you exactly how I’m trading GBPJPY this week.
The pound versus the Japanese yen has had an incredible run since March.
However, the recent pullback has me watching for a potential short setup.
Today’s video explains exactly what I’m watching to confirm the short and what would invalidate the idea.
Check out the GBPJPY video below and scroll down for the annotated charts and analysis.
Want a risk-free trade up to $300? Use my Recommended Forex Broker and get a refund of up to $300 if your first trade is a loss or a 20% deposit bonus! Limited time offer. Don’t miss out!
GBPJPY has had a tremendous run since March, especially the sprint that began in mid-June.
The last parabolic move of this rally sent GBPJPY 800 pips higher and broke ascending channel resistance from April 2022.
The GBPJPY is trading above a March trend line, carving higher highs and lows.
That’s the first thing to consider, as it makes shorting the pair risky without a confirmed setup.
As discussed in today’s video (above), it will take a sustained break below that March trend line near 180.60 to confirm a breakdown.
Until then, GBPJPY is holding above support, meaning there is no short setup.
That’s critically important to avoid shorting into support.
A sustained break below the March trend line would open up the neckline of a potential head and shoulders reversal pattern.
The objective, if confirmed, is the same 2022 channel top at 175.00.
But remember that there is no short setup without a confirmed break below the March trend line, followed by the 179.00 neckline.
Alternatively, a breakout above 182.00 would expose the recent highs at 184.00 and negate the bearish outlook, at least for now.
Get Lifetime Access to Our Trading Group for daily analysis videos, see Justin Bennett’s trades in real-time, receive exclusive trade setups throughout the day, and access over 1,000 other forex and crypto traders.