Support at 139.00-4/28/09 low continues to hold firm, as the pair continues to bounce along the level. The barrier could limit downside risks for high frequency traders and also provide a target level for entering and exiting positions. Since the failed test of support we have seen a rising trend channel develop which is creating the desired measured volatility for generating profits using a scalping strategy.
Quantitative Metrics
A wide Bollinger band width of 1270 pips for the GBP/JPY is a result of the prior bearish trend and a red flag for scalpers. Recent consolidation has led to a slight decline in the ATR, but at 230 pips it is the highest of the most traded pairs. Adding to the concerns for scalpers is a one week implied volatility of 16.61, as it signals that volatility will continue.
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