2025/08/07 GBP/JPY Trade Strategy

Today's GBP/JPY call: Buy.

Price has broken through the 4-hour resistance, so buying is the only thing to consider here.
I see around 197.5 as a key level, so the strategy is buying the dip and aiming for that level.

Scenario A
By the book, once price clears the current high, I’d buy the pullback that follows.
That said, price has been climbing in repeated waves even on the 1-hour chart, so honestly I’d like to wait for a proper pullback.
Ideally I want to buy only after it pulls back to at least around the blue line at 196.8.
Target: 197.5

Scenario B
If price fails to clear the current high and drops, I’ll treat the area from the recent low to around the pink line at 196.5 as a candidate for buying the dip.
On the 15-minute level this will be range-bound movement, so I won’t rush in and will act once I’ve judged the timing.
Target: 197

Scenario C
If price breaks below the pink line, I’ll sell.
Depending on how the chart shapes up, it may turn into a situation where both selling and buying are difficult.
Target for now: 196.3

Review

No trade.
There was nothing I really wanted to jump into.

Early on, price edged slightly above the high, so I considered Scenario A a bit, but it didn’t react at the recent high and the pullback was shallow and indecisive. While I was waiting for one more wave, it dropped.

After that it broke below, and shorting at the red circle as planned in Scenario C would have been fine.
However, as I wrote in the morning, the target was the pink line just below at 196.3.
The market context wasn’t one where price would keep falling steadily, so I judged the risk-reward unattractive and passed.
Entering as per the scenario is OK too, but you’d take profit when price reaches the pink line target. Even if you managed it well, you’d get about 12 pips at most.

After seeing the sharp rally that followed, I decided to call it a day and closed the chart.

You could consider a long at the blue circle, but the stop distance would be large, and with the UK interest rate decision coming up, it’s not a spot I can trade.