GBP/JPY is currently bearish to test the demand zone at 165.95. For that reason, this time you need to look for long opportunities in that area.

Hi fellow traders! GBP/JPY currently moves calmly and trades in a limited range because it is still covered by a neutral daily bias. At the time this analysis was written, the price was oscillating between the demand and supply zones. Hence, you can try to open a long position with the expectation that the price will increase after touching the demand zone.

gbpjpy

 

Analysis and Recommendation

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

gbpjpy 2

Based on the H4 chart above, it has been pointed out that GBP/JPY is declining to test the demand zone around 165.95 – 165.30.  As there is no decisive sentiment yet, the pair's range of movement is expected to be limited between the demand zone of 165.95 and the supply zone of 167.00. Therefore, long opportunities can be placed when there is a confirmed bullish signal.

Be aware if the price breaks 165.30 since it has the potential to continue wearing out and the short-term trend will turn bearish. The target of the bearish movement is expected to be towards the demand zone 164.30 – 163.70 or even lower.

  • Therefore, set a long position at 165.95 when the price manages to enter the demand zone and there is a bullish signal confirming it. Stop loss may be positioned at 165.30, while the profit target is at 167.54
  • Alternatively, set a short position at 165.30 when a significant breakout signal confirms it. Stop loss may be positioned at 165.95, while the profit target on 164.30.

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: 167.54, 167.00 (psychological level)
  • Support: 165.95, 165.30, 164.30, 163.70