JasperForex
Short

GBPJPY: Potential Double Top with Bearish Divergence

FX:GBPJPY   British Pound/Japanese Yen
This pair had a 300-pip rally yesterday on the 1H when most euro             pairs rallied after the Greek election results were known and speculation that the victorious Syriza party would not force an exit from the Eurozone gained ground. It reversed when it ran into strong structure resistance at 178.93. After a pullback its now approaching that same resistance level , but we have regular bearish divergence developing on both the RSI and the stoch , indicating the bulls are exhausted and a reversal could happen.

Should the price action indeed test the resistance level again and reverse, I will enter a short. Assuming it will continue its way down, I have marked two profit targets along the way, both just above key support levels. SL goes outside the channel, 15 pips behind the marked resistance level .

There are 110 pips on the line and the trade has a reward – risk ratio of 7.4!

UPDATE: Had I put the SL one resistance level higher (i.e. 28 pips higher), this would have been a winner, since a reversal did happen (after some initial sideway action) and PA continued its way down hitting both TP´s along the way for a total of 110 pips. My SL however was too tight, it did not allow the trade to breathe and I got stopped out when the sideway action exceeded the SL. With the SL one resistance level higher, the reward – risk would have been 2.4, still very acceptable. I made a note about this in my trading journal.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
i don't know why i can see that on a daily chart ...it is heading for 182
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UPDATE: Had I put the SL one resistance level higher (i.e. 28 pips higher), this would have been a winner, since a reversal did happen (after some initial sideway action) and PA continued its way down hitting both TP´s along the way for a total of 110 pips. My SL however was too tight, it did not allow the trade to breathe and I got stopped out when the sideway action exceeded the SL. With the SL one resistance level higher, the reward – risk would have been 2.4, still very acceptable. I made a note about this in my trading journal.
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