2025/04/07 GBP/JPY Trade Strategy

The GBP/JPY trade strategy for 2025/04/07 is to buy.

At Friday’s close it looked like the decline had stopped, but the first move of the week was a big gap down.
In the short term, buyers now have the upper hand.
You could argue the gap was filled at 188.8, but on the daily chart it’s questionable.
And the bigger trend is down.
Given all this, my trade strategy at this point is as follows.

Scenario A
The rise continues.
I’ll look for a long, but the market context feels quite tricky, so I want to be careful with entries.
The pullback after the breakout could also be fairly deep, so I’ll watch the lower timeframe to catch the upward move.
Target is around 189.5.

Scenario B
Like Scenario A, I’m looking for a rise, but this is the pattern where price chops around in a range before going up.
If it breaks below 187.3 I’ll switch to looking for sells, so I’ll judge whether it breaks lower or bounces from higher lows.

Scenario C
Price returns to the downtrend.
The higher timeframe context is bearish, so the move could extend a long way.
The initial target is around 186.2, but I’ll also keep in mind that the decline could accelerate and extend to around 184.

Review

After the morning strategy, the chart didn’t move for a while and formed something like a double top, so based on the higher timeframe environment, ○1 was a short.
This wasn’t really a pattern I had anticipated in the morning.
With the volatility there, you could take about 100 pips.

After that, price moved without clear direction, but at ○2, where it made higher highs and higher lows again, you could go long.
If you think of the target as the day’s range high, the risk-reward isn’t good, so it’s debatable whether to enter.
I think on days like this you don’t need to force a trade.
As it turned out, price extended quite a bit, so even closing at 189.5, the level assumed in the morning scenario, would have netted about 150 pips.