GBP/JPY Strategy: Pound Sets Up Topping Pattern vs Japanese Yen
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- Strategy: Short GBP/JPY at 149.43
- British Pound looks to have put in a bearish Head and Shoulders top
- Short trade activated, looking for a test below 147.00 vs Japanese Yen
The British Pound looks to have carved out a bearish Head and Shoulders chart formation after finding resistance below the 153.00 figure against the Japanese Yen. The setup hints a significant near-term top may be in place, with the pattern’s structure implying a move below the 148.00 handle ahead.
Near-term support is at 147.69 (trend line resistance-turned-support, 38.2% Fibonacci retracement), with a break below that on a daily closing basis opening the door for a test of the 50% level at 146.09. Alternatively, a move back above the 23.6% Fib at 149.674 exposes 150.42 (September 25 close) anew.
A compelling chart setup looks is bolstered by acceptable risk/reward parameters and a short GBP/JPY trade has been opened at 149.43, initially targeting 147.69. A stop-loss will activate on a daily close above 150.42. Profit on half of the position will be booked and the stop moved to breakeven if the first target is met.
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