I understand GBPJPY has risen for sometime now. However, looking at the longer timeframe (such as H4 below), I have to wonder if the price may come down from the current level.
As seen on the chart, the current level is Fibonacci 38.2%, Monthly Central Pivot and the resistance level.
Furthermore, I see Bearish Divergence on Hourly Stochastic. (Below)
Even if the price drops from the current level, the price has already broke 55EMA on H4 chart. So we cannot expect to see Lower Low on H4. But I am thinking the price can drop another 100 pips down to WPP (181.90 ish).
Here is the possible entry.
The price already made Lower low and Lower high. So the aggressive traders may have already shorted this pair. But conservatively, we could wait to see the next Lower high (or even Double top), before we can short.
Please be aware that this trade is a bit risky. But the beauty of this setup is… the stop can be very close – just above the previous high (183.370).
Hope this setup helps you develop your own setup.
YJ Baik – Forex.Today @ Tokkyo