2025/08/13 GBP/JPY Trade Strategy
Today's GBP/JPY call: Buy.
Price is rising with an eye on breaking the daily chart high.
Basically I have a bullish bias only; the one thing to watch is that we’re in a daily chart resistance zone.
Scenario A
Depending on how big the latest move up is, the S/R around the 199.7 high is a candidate entry point.
I’ll set the target at the recent high of 200, but I’d like to aim for 200.5.
Scenario B
The pattern where we get a deeper pullback.
In this case, I’ll wait patiently for the pullback before entering.
Target is 200
Scenario C
If price breaks below the pink line, it’s a sell.
Strictly speaking, I’m picturing a retracement after a break below around 199.3, slightly under the pink line.
Target is 199
Whichever pattern plays out, the overall environment is still an uptrend, so the big-picture strategy is to wait for a reversal even if price drops.
Review
It played out as Scenario A.
After seeing the downside stalling near the red support/resistance (S/R) line I mentioned in Scenario A, I went long at the red circle.
However, depending on your trading approach, this one becomes a breakeven exit.
The reason is that, in the short term, there has been a bearish shift, and price is in a range capped by the S/R marked in blue.
If price fails to break above that range and comes back down, it means the chance of another leg down increases.
On top of that, the market context is not a strong, runaway uptrend.
We’re in a daily chart resistance zone, and there’s a very real possibility of a drop from here.
Given all that, a breakeven exit is a valid way to manage risk.
By the textbook, the stop-loss level for an entry at the red circle goes below the light red marker line.
That’s because that price zone is where the 1-hour chart (H1) basis for buying breaks down.
The basic rule is to hold until the basis for buying breaks down, so once you’ve entered, accepting a certain loss and waiting for the outcome is also a correct stance.
This time price did rise once in the end, but there are plenty of cases where it just keeps falling and you get stopped out, so it’s a judgment call based on market conditions.
This article reflects the author's personal view of the market. It does not recommend any specific trade; all investment decisions are your own responsibility.
