GBP/JPY Trading Strategy – Short to Target 185I. Technical Analysis
1. Overall Trend
On the H4 timeframe, GBP/JPY remains in a downtrend, as indicated by:
Lower highs and lower lows.
Price trading below both the EMA 50 & EMA 200, confirming bearish momentum.
A weak pullback formation, suggesting a continuation of the downtrend.
On the D1 timeframe, GBP/JPY is moving within a descending channel, encountering resistance around 191.4 - 192.8 (previous swing high and descending trendline).
2. Key Resistance & Support Levels
✅ Strong Resistance (Sell Zone):
190.2 - 191.45: Confluence of the descending trendline + EMA 50 on H4.
192.8: Major resistance level and a logical Stop Loss placement.
✅ Target Support (Take Profit):
185.2 - 185.0: A strong support zone from the previous low.
✅ Indicators Confirmation:
Decreasing volume on price pullback, indicating weakening bullish momentum.
RSI below 50, not yet oversold, leaving room for further downside movement.
II. Trading Strategy
1. Entry Points
Sell GBP/JPY around 190.2 - 191.45 upon price testing resistance.
Consider splitting the order:
Sell 50% at 190.2
Sell remaining 50% at 191.45 (if price continues upward).
2. Stop Loss (SL)
192.8: A break above this level invalidates the bearish setup.
3. Take Profit (TP)
TP1: 187.0 → Close 50% of the position and move SL to breakeven.
TP2: 185.2 - 185.0 → Fully close the trade.
4. Risk/Reward Ratio (R:R)
Average Entry: 190.8
SL: 192.8 (-2.0 pips)
TP: 185.2 (+5.6 pips)
R:R = 2.8:1 → Reward is 2.8 times the risk, making this an attractive swing trade setup.
III. Risk Management & Market Scenarios
🔸 If Price Moves in Favor
✅ Upon reaching 187.0, move SL to breakeven, ensuring no risk exposure.
🔸 If Price Hits 192.8
❌ Exit the trade entirely, as the bearish structure is broken.
🔸 Key Observations
⚠️ If price aggressively rises to 191.45 with strong volume, wait for bearish confirmation before entering.
IV. Conclusion of me
Short GBP/JPY at 190.2 - 191.45, TP at 185.2 - 185.0, SL at 192.8.
Strong R:R ratio (2.8:1), suitable for swing trading.
Expected Holding Period: Until mid-week, closely monitoring price action.
Follow me now, good luck evrybody!
