2025/05/27 GBP/JPY Trade Strategy

The GBP/JPY trade strategy for 2025/05/27 is to sell.

On the daily chart, we’re still at a point where I’m wondering whether this will turn into a pullback and head higher, but for day trading my bias is currently to sell.
I want to go short while keeping in mind that this could become a pullback on the daily chart and rise.

Scenario A
If price keeps rising from here and makes a new high, I’ll treat it as a bullish shift and switch to long.
However, the 4-hour resistance concerns me, so the target is around 194.

Scenario B
If price retraces up to around the rally high and the rise stalls, I’ll look for a short.
It also seems possible that price gets capped around the current chart level without retracing that far.
In that case, I’ll wait for a chart pattern such as a double top and then go short.
Target is around 192.6

Scenario C
Selling the rally after a break below.
Target is likewise around 192.6.

Review

GBP/JPY was a day with no trades to take.
The lowest point on the morning chart is a 4-hour support/resistance (S/R) level, so I pictured a pullback forming on the daily chart from there, but price rose without any pullback, so it was a pattern I couldn’t trade.

At circle ① you need quick reflexes, but you can go long.
The idea is to buy from the S/R after price breaks above the 4-hour resistance.
However, if you buy here, setting the stop-loss level becomes tricky.
If you set it by the book, the stop loss would be about 90 pips away, which makes the risk-reward difficult.

After that, you can short at circle ②, reading it as a bearish shift.
However, since this trade goes against the daily and 4-hour charts, it’s not a spot where you can enter late at night and leave the position unattended.