2025/07/21 GBP/JPY Trade Strategy

Today's GBP/JPY call: Sell.

The pair has been ranging ever since July started, and it’s still in a range now.
I’m building my near-term strategy on the assumption that price keeps moving within the 198.3–199.8 range on the 4-hour chart (H4).

Scenario A
If price breaks above around 199.5, I’ll look to buy.
Until then, I’m a seller.
If it breaks above, the flow would be another push toward the range high, but unless you go in assuming a breakout of the range, the risk-reward isn’t good.
Target: 200.6

Scenario B
The near-term retracement ceiling is around 199.4–199.5.
If price retraces to around this area and the move stalls, I’ll look for a short.
Target: 198.3

Scenario C
If it drops, I’ll be selling the rally.
Judging by the shape of the 4-hour chart (H4), it wouldn’t be surprising to see a drop from the current price.
In that case, the idea is to follow the move with the range low on the 4-hour chart (H4) in mind.
Target: 198.3

Review

It was scenario C: selling the rally after price first broke to the downside.
However, the retracement went deep, so this is a pattern that’s hard to enter if you’re only watching the lower timeframes.

As I wrote this morning, the premise was a picture of the 4-hour chart moving down, and since the 15-minute chart had already made a new low once, a short from the red circle has a small stop distance and a very good risk-reward.
The flow is to wait for a 5-minute chart (M5) level turn down (making lower highs) at a spot like that and go short.

Take profit as price bounces after reaching the recent low. 40 pips