2025/05/06 GBP/JPY Trade Strategy

Today's GBP/JPY call: Sell.

The market context hasn’t changed much: both the daily chart and the 4-hour chart (H4) are bullish.
The 1-hour and lower timeframes are bearish.
For day trading, the strategy is still to look for selling the rally, while following the move with buys if price turns back up.

Scenario A
From the current structure, I’ll treat a break above the line around 191.5 as a bullish shift.
Let’s wait, planning for a long entry off support/resistance (S/R).
The first target is around 192, but it would be good to extend further depending on momentum and conditions.

Scenario B
This is today’s main scenario, in line with the bearish flow on the 1-hour chart.
Go short after confirming that the resistance zone is being respected on the retracement.
Price may not come all the way back to the line, so I’ll decide on entries while keeping risk-reward in mind.
The target is around 190.7.

Scenario C
This is selling the rally after a break below, but it may be a bit tricky to trade.
That’s because price will be entering a price zone where the 4-hour chart (H4) could bounce at any time.
This isn’t a situation where you can go short and just leave it, so be careful with entries.

Review

There were two opportunities. The first was the short at circle ① under Scenario B.
As I wrote in the morning, this entry was based on the possibility that price wouldn’t retrace all the way back to the line.
My read was that the awkward high made around 10:30 am JST (01:30 UTC) would be respected.
Price broke cleanly through the 190.7 target, so I held, but I took profit once I saw the move stall near the 190.5 round number. 55 pips

The second was the short at circle ②.
This is selling the rally against the drop made at circle ①.
The best entry is from around circle ②, the retracement after the short-term uptrend broke down.
The target is the low made at circle ①, the recent low at 190.5.
Since this is late at night, once you’ve confirmed the drop around 2 am JST (17:00 UTC the previous day), you can move your stop-loss level to breakeven, set a limit just above 190.5, and go to bed. 58 pips