2025/02/27 GBP/JPY Strategy
The market context has been unchanged for about three days.
Overall I see the downside as favored, but on the 1-hour chart (H1) and 15-minute chart (M15) there’s zero momentum.
Basically, I think it’s fine to wait for the range to break either up or down and then rethink the trade strategy, but if you want to go after smaller moves, I’d go with the following scenarios.
Scenario A
Around 11 am JST (02:00 UTC) it looked like it might turn up, but since then it has formed a double top and is turning down (making lower highs).
It has also broken the double top’s neckline, so going long right now isn’t an option, but a scenario of going long on the pullback after price breaks the recent high again is valid.
Target is around 189.5, the range high.
Scenario B
If you’re looking to short, it’s best to wait for a break below the recent low around 188.6 and then aim for the retracement. Target is around 188.3, the range low.
Review
Price made a move that looked like it might break the range high, but in the end it came back inside the range.
○1
This is the spot for a long in line with the morning’s Scenario A, but it’s a bit of a tough call.
If you watched the 5-minute chart closely, judged that the blue line was holding firm and entered, you were done for the day.
Taking profit around the point where price rallied and then formed a double top at the upper blue line is fine.
○2
Just when it looked like a range breakout, price dropped again, and this is selling the rally after the bias turned to the downside.
Price was moving quite fast here, so you needed to commit to the entry, but the risk-reward wasn’t bad. Take profit at the blue line.
The data release was also close, so watch out for the spread widening.
You could also go short somewhere in the red circle where price fell back from the red line afterward, but a bounce up from the blue line was also possible, and since it was late at night, I don’t think you need to be aggressive there.
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.
