GBP/JPY fell to 160.28 after BoJ announced its latest policy. The pair is now dominated by a very strong bearish sentiment.

Hi fellow traders! GBP/JPY was seen to have fallen on Tuesday (20/December) as the Japanese Yen was suddenly rising and toppled all of its rivals after BoJ announced policies that shocked the market. The following is the movement of GBP/JPY on the Daily chart:

gbpjpy

 

Analysis and Recommendation

Let's take a look at the following GBP/JPY H4 chart below: 

gbpjpy

Based on the H4 chart above, it has been pointed out that GBP/JPY is consolidating after suffering a sharp slump during the Asian trading session. This pair might try to test the supply zone 161.80 – 163.25 and is expected to continue wearing out toward the demand zone target of 159.60 – 158.21.

Be aware if GBP/JPY manages to rebound past the 163.25 level since the price could continue to rise to recover the situation up to the supply zone 166.20 – 167.41 or even higher.

  • Therefore, set a short position at 161.80 when the price manages to enter the supply zone and there is a bearish signal confirming it. Stop loss may be positioned at 163.25, while the profit target is at 159.60.
  • Alternatively, set a long position at 163.25 when a significant breakout signal confirms it. Stop loss may be positioned at 161.80, while the profit target on 166.20.

Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!

GBP/JPY key levels: 

  • Resistance: 167.41, 166.20, 163.25, 161.80
  • Support: 159.60, 158.21