GBPJPY: Double-top on December peak hit today as pair tests higher and over that resistance line of 189.68
The daily candle chart below shows the medium term price history of the Great British Pound (GBP) versus the Japanese Yen (JPY). This currency pair is known as GBPJPY, and is trading near 189.63 around time of publication - and just off session highs of 189.99 earlier this Thursday.
This pair was reviewed in Ideas You Can Trade just last week when the December high of 189.68 was described as approaching and where a double-top could occur. That resistance line was reached today and the pair pushed slightly higher before finding resistance just below the psychological level of 190.00 - where orders where likely triggered.
Now that the pair is testing the December high resistance line, as well as the session high of 189.99 - a break above the latter of these should signal a bullish continuation - although closing above 189.68 (the December high) and building support above that level - could also enable the pair to continue its steep climb.
While the GBPUSD strength has helped lift the GBPJPY cross-pair - the recent USD strength that pushed the JPY weaker also enabled GBPJPY to get the needed boost towards current levels (i.e. if JPY weakens 2% against the USD and the USD weakens 2% against the GBP, then the GBPJPY rises 4% - as the cross is calculated by the sum % change of both underlying major pairs).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 190.01 with a Limit to take profit @ 190.89 and a stop-loss @ 189.35 Risk/Reward Summary: Limit risk = 88 pips profit / (-66) Stop-loss risk = Gain to Loss ratio = 1.33
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 188.23 with a Limit to take profit @ 187.67 and a stop-loss @ 188.65 Risk/Reward Summary: Limit risk = 56 pips profit / (-42) stop-loss risk = Gain to Loss Ratio = 1.33
Medium Term Daily Candle Chart:
Medium Term Daily Candle Chart (zoomed-out):