2025/05/20 GBP/JPY Trade Strategy

The GBP/JPY trade strategy for 2025/05/20 is to buy.

It’s a pretty tricky situation. To sum it up: the daily chart says buy, the 4-hour chart is unclear, and the 1-hour chart (H1) is ranging (with buyers having the edge).
If you build your strategy on the 1-hour chart (H1), it’s a buy, but the 4-hour chart is ambiguous.
If you want to avoid risk, it’s also fine to wait for Scenario A or C, where the direction on the 4-hour chart becomes clear.
If you follow the 1-hour chart (H1), the setup is starting to look good enough to enter soon.

Scenario A
Buying the dip after a break to the upside.
I’m picturing the daily uptrend continuing.
However, the 4-hour chart formed a double top last week, so I think that area will act as a resistance zone.
Target is around 195.

Scenario B
Going long from around the range low.
If price breaks higher, there may be a chance for a big profit, but there’s also the pattern where it keeps chopping around indecisively after you enter and wears down your nerves.
It’s best to keep the position size small, take a trial buy and just leave it.

Scenario C
If price breaks to the downside, it’s a bearish shift.
I’ll look to sell the retracement.
Target is around 192.7.

Review

This is Scenario C, but on the first move price is turning up (making higher lows), so I pass on it and go short on the second one at circle ①.
Price breaks the low only slightly and then rises right away, so this ends in an exit at a tiny profit or break-even.
In the short term it also looks like a bullish shift has taken place, so if price moves differently from what I expected, I exit immediately.

After that, price breaks to the upside, so I look to buy.
On the pullback that follows, I go long from the S/R at circle ②.
Price dips against me a little after entry here, but the structure on the 1-hour chart (H1) also favors buying, so this is a spot to hold on.

There are two take-profit patterns.
Either exit with a small profit after seeing the double top and the upper wick, or push through, hold, and take profit where the move stalls just before the pink line. 30pips
Since it’s late in the day, it’s probably better to just take the small profit quickly.