*Quick technical analysis of the GBPJPY 1 hour price chart*
This is a quick charts blog post to show you what I am looking for in regards to my next trade on the Pound vs Yen FX currency pair.
This is purely technical analysis and a potential trade that I would consider to be reasonably high risk due the current Brexit negotiations that are going on. The trade set up is based on my main trendline break strategy that incorporates multiple indicators and simple trend analysis.
Let’s look at the 1hr timeframe chart as at 2pm this afternoon.
Price has been very bullish on this FX currency pair over the last 7 days with only small pullbacks being made. I am now waiting for the lower 1hr timeframe bullish trendline to be broken and a lower low to be made in order to capitalise on the next bearish pullback, that I believe, is long overdue.
I want to see a clear 4hr and then daily rejection candle close below the 132.800 resistance zone and the trendline and 1hr 50ema to be broken before I then look for a potential entry.
My ideal entry will then be on the next lower high and rejection/bounce off of the daily pivot level and 1hr 50ema. I cannot predict where this entry price might be until the daily pivot level and 50ema adjusts as price moves.
With a conservative 70 pip stop loss and targeting 129.050 I estimate this trade could produce a potential return of 5:1 RR.
TOP TIP: Always wait for confirmation of the current trend to be reversed by looking for a trendline break/high & low reversal.