GBPJPY Resumption of Trend Following Pullback
The pound-yen’s day-to-day trend has been bullish ever since it turned north on the second day of this month. It pulled back on Friday, but not enough to do any apparent damage to the general overall trend. The likelihood of its resuming an upward trajectory is also supported by the strength of the British sterling against the Japanese yen in light of an expected early 2016 increase in interest rates by the Bank of England, and the Bank of Japan’s medium-term quantitative and qualitative easing.
I will therefore be looking for an opportunity to enter a long position somewhere around the 184.00 level (about as far off the pace as price typically deviates) if this is accompanied by a hook upward in the short-term trend. I will be placing my stop loss 20 pips below my entry price on the assumption that this much of a drop will clearly indicate the factors on which my decision was made were invalid. My profit target will be 184.59 given that this area looks to be a major zone of resistance.
I will therefore be looking for an opportunity to enter a long position somewhere around the 184.00 level (about as far off the pace as price typically deviates) if this is accompanied by a hook upward in the short-term trend. I will be placing my stop loss 20 pips below my entry price on the assumption that this much of a drop will clearly indicate the factors on which my decision was made were invalid. My profit target will be 184.59 given that this area looks to be a major zone of resistance.
Trade closed: target reached:
The trade not only turned out to be successful, but behaved almost as if it were following a script I had written in advance.