mjahan4x
Long

Upside projection on GBP/JPY. [short-term swing trade]

FX:GBPJPY   British Pound / Japanese Yen
Although a purely technical based trade, it should be noted that important economic factors will be coming into play in the upcoming week in regards to Theresa May's plan B deal, which is to be voted in the houses of Parliament. We also have GDP Q4 readings for GBP which is predicted to be a weak number following a slow-down in the manufacturing sector in January. This means that fundamentals could throw this trade out of the skies, or could provide the necessary volatility to skyrocket this pair to target. Either way, appropriate risk-management should be applied ALWAYS.

Onto the technicals, the Daily chart is showing doji candles forming at an important weekly psychological level which indicates bearish momentum slowing down, as well as finding support at our dynamic ( EMA ) zone.

When we delve into the H4 charts, we can see a long bearish wick penetrating intra-day support before closing above the support zone , indicating a failed rally by the bears. Daily trend indicates a bullish momentum and currently we are exhibiting a counter-trend line on the H4 charts, giving us a nice trend-line break-retest trade.

In terms of risk-management, a 0.5%-1% risk tolerance should be applied in this scenario as it is a moderate probability trade given the fundamental background surrounding Sterling. Given the economic climate of GBP, a low risk tolerance should always be applied to protect ones capital!

This can produce a nice 1:2+ risk:reward if traded right!


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