On Aug 13th, I posted GBPJPY short trade setup.

The basicidea behind that trade was

a) Bearish Divergence on Daily Chart
b) so Short from Triple Top (H4 chart) 195.00 ish

The pricedid drop from 195.0 ish down to 193.80 ish on Aug 17th.

 

Here we are today on Aug18th, Daily chart looks like below.

I’d say the situation looks identical with the bearish divergence on the Stochastic.  I think the price should come down to 55EMA level (192.0 ish).   But that’s not what I decide.  Also during this Summer vacation season, I am not sure how much technical analysis would work out.

2015-08-18_13-27-04-GJ1

 

Nonetheless, GBPJPY pair has moved over 100 pips per day.  So don’t be too greedy.  Even if the price doesn’t come down to 192.00 level, you could still earn some pips out of this pair.

Anyway, I would like to setup 2 Short trades because of the Bearish divergence, even though the price is riding 21 EMA on the Daily. (which typically means Very Bullish”)

 

SHORT TRADE PLAN 1:

Short from 195.00.

195.00 seems to be a hardcore resistance, rejecting the price for 3 times on H4 chart.  Why not to expect another rejection from this point.   Be aware, however, that this is H4 chart.  So you will end up waiting for a long time. The first drop from 125.00 occurred on Aug 6th.  Second one occurred on Aug 12th, and the third one on Aug 17th.   I am not predicting when it will occur again next.   I am simply saying it won’t be today, or tomorrow.  Hopefully this week, or maybe next week.

2015-08-18_13-55-01-GJ2

 

 

 

SHORT TRADE PLAN 2:

Short from 194.50.

This is Hourly chart (below), showing yesterday’s sell off from 195.00 ish down to 193.80 level.    Considering the bearish divergence on the Daily, it would make sense to expect the drop from even lower price, not from 125.00.     I could sell from 124.50 Psyco level / Fib50% / Role Reversal area.    Also another possibility is Fib38.2% level which is also DPP area.

2015-08-18_14-00-24-GJ3

 

 

Long story short

We could short from

a) 195.00 (1st target 194.  2nd target 192.00 – Daily 55EMA)
b) 194.50 (Target 193.20 – Fib 138.2%)
c) 194.30 (Target 192.80 – Fib 161.8%)

depending on the timeframe you are focusing on.

 

Hope these trade plans help develop your own trade plans.

 

YJ Baik – Forex.Today @ Tokyo

 

 

 

 

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