2025/08/01 GBP/JPY Trade Strategy

Today's GBP/JPY call: Buy.

It finally broke above 199, but on the daily chart it’s still unclear.
For now I’m a buyer, but it would be easier to buy after a bit of a pullback.
Right now price is at the overextended tip of the move.

Scenario A
If it breaks the high once more, a break of the high on the daily chart comes into view as well.
If it breaks, I’ll wait for a pullback and go long.
Target is 199.8

Scenario B
Price is currently in a range on the 15-minute chart, and I see the range low at around 198.8.
If it starts to look like it’s holding firm, I’ll look to go long.
Target is the range high at 199.5; if it looks like breaking above, same as Scenario A.

Scenario C
If it breaks below 198.8, I’ll judge it as a dip forming a pullback for now.
I think the downside will be around 198.5.
Selling in Scenario C means trading against the trend, so it’s important to take profit and cut the loss early.
Target is 198.5
For a deep pullback, I’ll allow for a move down to around 198.2.

Review

It turned out to be Scenario C.

This was a short from circle ①, on the retracement after price broke below the line around 198.8 that I had seen as the range low.
Price easily broke through 198.5, which I had set as my target, so I held.
Around 197.7, where it started to look like the decline was stalling, is the 4-hour pullback low.
With NFP (nonfarm payrolls) coming up, this is where I closed out. 93 pips

After the NFP release, price dropped much further, but that’s not a move I’d take.
“I should have held” is just hindsight. It’s frightening to imagine what would have happened if I had held and price had instead rallied by the same room to run.
When the market moves sharply in one direction, even a stop loss may not work, so the golden rule is not to gamble.