GBPJPY is following my plan
GBPJPY has been playing right into my trading plan this week. I started piling on shorts after I saw the evening star confirm on the daily chart on Monday for 3 trades of +100 pips each. I was targeting 155.00 as stated in my previous post, and sure enough price hit 155.00 almost to the pip today in London trading. When I woke this morning to check my charts at 7am New York time, I saw a golden opportunity staring at me in the face! Since the target had been hit and price was consolidating near 155.50, the smaller time frames were oversold at that point, just prior to the 8:30am news release. I figured there could be more room for a movement to the upside at that point, especially since the news was jobless claims which has been moving the markets positively the past several weeks. Also pointing up: there was positive divergence on the CCI on the 1 hour chart. So, about 15minutes after the news released I entered a long trade at 156.10. I managed to hang on for +100 pips, it was a quick trade, about an hour and a half. So now it looks like the GBPJPY is following along my big picture trade plan: it appears to indeed be heading back up to possibly form the right shoulder of this head and shoulders pattern on the daily chart. If you fib from the high at 162.50 to the recent low at 155.00, the 61.8% retracement is 159.60, pretty darn close to the 160.00 area I was originally thinking. I will observe the price action at that level (if it gets there) and look to enter a short to ride this back down to the neckline again at 155.00. Of course, price may not have the strength to reach 160 area, or it could blow right through it. That is why I prefer to set an alert for my price targets to actually see how price behaves before making any decisions. Wish me luck, and good luck to you.

Jennifer Shotts

Casey Stubbs has been trading for 14 years. He started trading in the stock market and moved to Forex.
Richard draws from his extensive experience trading to write insightful trading articles for both fundamental and technical analysis.
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