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This setup is designed based on what we looked at in our last GBP/JPY Technical Analysis article.
I’m still holding some long Yen exposure from my short AUD/JPY setup; and after a quick move of strength in JPY, this affords the opportunity to balance off some of that long-Yen exposure. With Article 50 being triggered tomorrow, we’ll likely be seeing some volatility around GBP. For the past week, bulls have attempted to support GBP/JPY, and this has created a short-term trend-line that syncs well with a prior trend-line after the ‘flash crash’ in October.
Chart prepared by James Stanley
Stops on the position can be adjusted to the four-month at ¥136.18 low to take on approximately 200 pips of risk. This would allow the previous swing high at ¥140.61 to act as an initial profit target with a better than 1-to-1 risk-reward ratio, at which point stops can be adjusted to break-even.
Additional profit targets can be set to ¥141.70, ¥142.45, ¥143.32 and then ¥144.70.
Chart prepared by James Stanley
Long GBP/JPY at Market
Stops set to ¥136.18
Profit Targets at ¥140.61 (break-even stop adjustment), ¥141.70, ¥142.45, ¥143.32 and then ¥144.70.
--- Written by James Stanley, Analyst for DailyFX.com
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