Early Morning Binary Trading on the GBPJPY

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GBP/JPY Bounces From Post-Brexit Trend-Line: Will it Hold?

– When good news brings on bearish behavior, change may be on the horizon, that’s seemingly been taking place in GBP/JPY over the past week.

– GBP/JPY has been in a hard bearish trend until running into a longer-term trend-line projection earlier this morning. But will this support be enough to completely turn the tide of the past two weeks’ pain?

– Are you looking to improve your trading approach? Check out Traits of Successful Traders . And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide .

If you’re looking for longer-term analysis on GBP, JPY or the US Stocks, click here for our Trading Forecasts .

When Good News Goes Badly

The Japanese Yen has recently run-in to a rather pronounced bout of strength over the past couple of weeks. USD/JPY sold-off to a fresh yearly low earlier this morning, and this extends a pattern that’s seen the pair fall for five of the past six weeks. In yesterday’s webinar, we discussed the premise around Yen-strength , and this is seemingly taking place in a backdrop that should be conducive for Yen-weakness. BoJ Governor Haruhiko Kuroda appears to be headed for a second term atop the Bank of Japan, and given the fact that he’s the architect behind the massive stimulus program out of the country, it would reason that this would bring expectations for more of the same.

But price action has not indicated that, as Yen-strength has continued to show fairly visibly across the FX-spectrum even in the initial wake of that announcement. In the British Pound, we have our own host of bullish factors: The Bank of England posed a hawkish twist towards policy just last Thursday, and UK inflation yesterday came-in at 3% ; further echoing the need for tighter monetary policy in the economy. But – those factors seem to have mattered little in GBP/JPY, where prices have peeled-lower every day since that BoE rate decision. On the hourly chart below, we’re looking at the slalom that’s developed in price action since last week’s Bank of England rate decision.

GBP/JPY Hourly Chart: When Bullish Factors Bring Bearish Drive – Lookout

Chart prepared by James Stanley

Trend-Line Projection Shows Support

This morning’s sell-off seemed to hasten and, eventually, found support after the release of US Inflation numbers . Prices dropped down to fresh two month lows until support began to show off of a trend-line projection. This trend-line can be found by connecting the ‘flash crash’ low on October 6 th , 2020 to the August 2020 swing low; and this comes after Fibonacci resistance showed-up earlier in February around 156.38.

GBP/JPY Daily Chart: Support Builds Shows From Trend-Line Projection

Chart prepared by James Stanley

Be Careful – GBP/JPY Appears to be Waking Up

While the above support could be used for bullish continuation strategies, traders would likely want to exude caution if looking for topside exposure. The Yen-strength that’s shown over the past few weeks aligns with the rise in US yields, which may be indicating a deeper bout of risk aversion on the horizon. And however that pans out, the rate of change in GBP/JPY is undeniable, as we’ve just seen two months of gains erased in under two weeks, indicating that we’re seeing an expansion of volatility in a pair that has a penchant for such. Perhaps more disconcerting to bulls is how prices were unable to hold above the psychological level of 150.00.

This could be an opportune time to take a step back in order to allow near-term trends to align with longer-term price action. Prices digging out some element of support around the 147.04 level can keep interest around bullish strategies, plotting for a reversal of this recent bearish price action into the direction of the longer-term trend. That level is derived from the 38.2% retracement of the 2020 major move, and the 50% retracement of that same study helped to set resistance earlier this month.

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GBP/JPY Daily Chart: Return to 147.04 in Store?

Chart prepared by James Stanley

For bearish strategies, traders would likely need to use shorter-term charts with more concentrated risk amounts, so that if the bigger picture bullish trend does come back, losses can be contained.

Price action is making a quick jump after that trend-line inflection earlier this morning, and on the below hourly chart, we’re looking at three potential resistance levels that could allow for short-side continuation of this recent bearish theme. The key for working with any of these levels is to wait for resistance to actually show, as indicated by an extended wick on the four-hour chart, highlighting potential seller response to the level, in which stops can be placed on the other side of the eye of the wick.

GBP/JPY Hourly Chart: Potential Resistance Levels Applied

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on GBP and/or JPY? Our DailyFX Forecasts for Q1 have a section specifically for each currency. We also offer a plethora of resources on our GBP/JPY page , and traders can stay up with near-term positioning in GBP/USD and USD/JPY via our IG Client Sentiment Indicator .

— Written by James Stanley , Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

GBP JPY Forex Simple Trading Strategy With 90% Winning Rate

GBP JPY Forex Simple Trading Strategy – ( Works on All Time Frames and for all Pairs – Best used on 5Min/15min/ for short term Trades and 30min/1Hr/4hr/daily for Long term Trades ).

I am trading in GBP/JPY and other currencies using this Simple method for quite sometime now and its proven to be successful 90% of the times, the only times it has failed is when a spike up or down during news time, so I discourage anyone to stop using this 30 mins prior and after the news to escape from the whipsaws.

This method should work good on all pairs, but due to the high votality and movement, I love to work on GBP/JPY pair, gives very high Risk to Reward Ratio. For pairs apart from GBP/JPY, you may need to experiment with the TP and SL abit.

The most Important part in making this method a success is to stick to the rules at all times and get into the trade when uhave the indicators giving you the signal. Please study the rules properly and do not enter into trades just for the sake of entering, even waiting for the correct signal itself and staying out itself is a trade in itself. If you stick to the rules of entry, I assure you your winning rate will be as high as 90%.

I personally feel this works best from 7:00 GMT to about 20:00 GMT.

I have added the Pivot indicator as its very helpful to find the expected levels of support and resistance without too much of headache. As a thumb rule, you should look to Long the Currency if the price is above the Pivot Line and Short it if the price is below the Pivot Line. I will be explaining it more as we take this forward.

I am not going to explain in details about what all the indicators are , what are pivots , what are support and resistance, for that please visit www.babypips.com an excellent resource for learning about Forex.

I) First Setup ( Best Setup – Maybe able to catch moves of +50 to 150 pips )

For Long : What you need to do is first look if price is above the Daily Pivot, and then look if the the LaGuerre 1 (henceforth called as Lag1 ) is above 0.15 and going upwards , StochHistogram ( Henceforth called as Stoch) is gone from negative to positive , MACD has made a crossover to positive ( Crossover above Zero Line ) and LaGuerre 2 ( Henceforth called as Lag2) is at the bottom ( for Extended Period of time ) or trending upwards above 0.15 .

Example as below

II) Second Setup ( when Price is already climbing up ) – Maybe able to catch moves of +30 to +80 pips

For Long : What you need to do is first look if the the LaGuerre 1 ( henceforth called as Lag1 ) is at or above 0.45 and going upwards , StochHistogram ( Henceforth called as Stoch) is gone from negative to positive and climbing and LaGuerre 2 ( Henceforth called as Lag2) is at 0.45 or above and trending up.

I don’t recommend to take any other long setup apart from this unless all the indicators are pointing in that direction.

Check if 1min, 5min and 15min Lags are in agreement to take trades apart from the ones mentioned above.

Exits for Long ( Multiple Options – Choose whichever option as per your Take Profit Level )

  1. When Lag-2 crossed 1.00 and then starts to come down below 0.85
  2. When you get +50 pips
  3. Daily R1 – ( First Resistance above Daily Pivot )
  4. Daily R2 – ( Second Resistance above Daily Pivot)
  5. MACD crossover from Positive to Negative and Red lag is turning down
  6. When Stoch Histogram goes from Positive to Negative, and Red Lag is pointing Down ( both conditions have to be met , if not take 50% profit and let the trade run )
  7. When the Stop Loss is hit ( 20 pips + Spread ) – This is likely to happen only if you have not taken the trade as per rules or taken a trade 30 mins before or within 30 mins of news.

If anyone has more suggestions, kindly email me so I can look into it and add to the exits.

I) First Setup ( Best Setup – Maybe able to catch moves of +50 to 150 pips )

For Short : What you need to do is first look if the the LaGuerre 1 ( henceforth called as Lag1 ) is below 0.85 and going downwards , StochHistogram ( Henceforth called as Stoch) is gone from positive to negative , MACD has crossover to Negative from Positive ( Below Zero Lines ) and LaGuerre 2 (Henceforth called as Lag2) is at the top ( for extended period of time ) or trending downwards below 0.85

II) Second Setup ( when Price is already climbing up ) – Maybe able to catch moves of +30 to +80 pips

For Shorts : What you need to do is look if the LaGuerre 1 ( henceforth called as Lag1 ) is at or below 0.45 and going downards , StochHistogram ( Henceforth called as Stoch) is gone from positive to negative and climbing down and LaGuerre 2 ( Henceforth called as Lag2) is at 0.45 or below and trending down.

Exits for Short ( Multiple Options – Choose whichever option as per your Take Profit Level )

  1. When Lag-2 crossed 0.00 and then starts to come up to 0.15
  2. When you get +50 pips
  3. Daily S1 – ( First Support below Daily Pivot )
  4. Daily S2 – ( Second Support below Daily Pivot)
  5. MACD has crossed over to positive and red lag is turning up
  6. When Stoch Histogram goes from negative to positive, and Red Lag is pointing up ( both conditions have to be met , if not take 50% profit and let the trade run )
  7. When the Stop Loss is hit ( 25 Pips including Spread ) – This is likely to happen only if you have not taken the trade as per rules or taken a trade 30 mins before or within 30 mins of news.

Stop Loss for all the entries for Long and Short is 20 pips plus spread from the best setup as per rules.

If anyone has more suggestions, kindly email me so I can look into it and add to the exits.

FxWirePro: GBP/JPY dragonfly puzzles major trend by missing probable morning star pattern – Stay short via tunnel spread

Friday’s spike in the pair hasn’t been moving anywhere beyond 136.230 levels northwards nor even below 135.854 levels on southwards.

Failure swings at the resistance of 136.230 (21SMA), have now broken supports at 135.854 levels.

The above price behaviour is not isolated with price and volumes, both leading and lagging oscillators indicate selling pressures.

Selling momentum is intensified as we can make out from the leading oscillators converging downwards along with the dipping prices.

While RSI (14) trending below 41 levels that signals the strength in selling interests.

Stochastic oscillators have reached oversold territory but no convincing %k crossover is seen, instead intensified selling momentum is observed.

On a broader perspective, its been urged for more price declines ever since dragonfly doji is attempting to bottom out, but bears resume missing out probable morning star pattern on the monthly chart.

Current prices have pushed below SMAs curves on 1H chart. Bears have managed to slide below 7EMA after gravestone pattern on the weekly chart as well, for now, the drag towards 129.750 seem more likely.

Well, since implied volatility is very high in GBP crosses on the eve of BoEs monetary policy on Thursday which seems unlikely to provide more easing in its bank rate decision, on an intraday speculative basis, it is good to buy tunnel spreads which are binary versions of the debit put spreads.

This strategy seems best suitable on speculative grounds for certain yields but with leveraging effects. This is just for an intraday trading perspective, but in the long run, this is certainly not yet an ideal time for fresh longs.

Daily Forex Market Update: Being Short on the GBP/JPY Today

Today John Putman added to his daily market update four charts to better demonstrate the instruments’ circumstances. See and read

ABOUT THE AUTHOR: John Putman II is a full-time trader and managing member at FX Analytics, a third-party research provider focused on exchange rate modeling, economic complexity, genetic programming and distributive computing.

In early trading we saw the Aussie, Euro and Pound Indices all gain ground. The Kiwi weakened overall while the Swiss and Dollar remained relatively unchanged. The Pound Index is slowly approaching resistance which is a good thing as I’m on the wrong side of a GBP/JPY trade and can use all the help I can get, and the Kiwi is sitting at its macro support. These two may warrant further analysis as there may be potential setups in the underlying pairs. The balance of price action in the other exchange rates is relatively neutral.

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January the 20th, 2020

In the matrix this morning, there are 16 regression signals, six of which have cyclical support, but only two aren’t suffering from counter-momentum. Those will be put aside until this afternoon and then reevaluated. Of the two that are left, GBP/USD and NZD/CAD, the latter is of more interest to me at this time. I’m currently short the GBP/JPY, and taking a beating on it, and the correlation between that and the GBP/USD is just a little too high, I’d likely end up with unintended leverage by adding it in. While the correlation between the GBP/JPY and the NZD/CAD is actually negative, getting long the NZD/CAD while short the GBP/JPY actually puts it in gear to a small degree. Difficult to squeeze out all the risk.

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