December 7, 2009

Latest GBP/JPY Analysis - 07 December 2009

The GBP/JPY pair is looking interesting at the moment because after consolidating around the 150.00 area for several weeks, it fell sharply to 140.00 but has now recovered most of these losses. Indeed the pound has strengthened against the yen quite considerably because it is now trading at 147.26 at the time of writing, and was above 149.00 on Friday afternoon.

So where does it go from here?

Well if we start by looking at the daily chart, the Supertrend indicator is still red, which obviously means that the price is still technically trending downwards. There's not a great deal in it because it only needs the price to close above 149.38 for this indicator to turn bullish, but for now I personally will be looking to go short.

With the price trading nearly 800 pips above it's most recent low, I think there is still plenty of downside potential, and we are certainly due a retracement of some description. Therefore I am currently watching the EMAs on the 4 hour chart because as soon as the EMA(5) crosses below the EMA(20) I shall be ready and waiting to open a new short position.

I've got a terrible feeling it's going to happen overnight when I'm tucked up in bed, but hopefully it will hold off until tomorrow morning at the earliest, so I can trade this particular set-up. As long as the price doesn't close above 149.38 (which would indicate a new upward trend), I'm confident about trading any downward EMA crossovers that may occur in the near future.

(Just a reminder that this does not in any way constitute financial advice. It's just my own personal opinion).

UPDATE: The GBP/JPY pair, or at least the EMAs for this pair, did cross downwards overnight, but thankfully I managed to go short at 146.00 after a nice retracement this morning. I've already closed half the position for 70 points and dropped my stop loss to break-even, so it's now a free trade. My next target price is around 144.20 because this is the next key fibonacci level.

UPDATE 2: Second half of the position closed out at 144.20.

 

 

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5 Comments on Latest GBP/JPY Analysis - 07 December 2009 »

December 8, 2009

Aldo Diana @ 10:21 am:

Dear Sir
I checked the daily chart on this pair and You say that the supertrend is still red. I wonder which supertrend indicator You have, mine is from IG Index and on the daily one turned green on the forth and it has been flat since then.
I follow your site but unfortunately I never entered a trade following your analysis.
I should have because they are quite accurate, so please excuse me regarding this supertrend. Thanks and have a good dat trading

James Woolley @ 10:49 am:

Hi Aldo,

I use the ProRealTime charts but because I also have an IGIndex account, I just checked the chart and the daily Supertrend was still red.

I noticed a long time ago that the Supertrend levels can vary between charting software (depending on when their closing prices are determined, which time zone they use, etc) however in this instance the Supertrend is red on both charts.

On ProRealTime the Supertrend currently stands at 149.38 and on IGIndex it currently stands at 149.27.

Actually I've just got to the bottom of it. It's because in both charting packages under the options menu I choose not to display weekend data. If you untick this box you should have the same settings that I use.

Ezmai @ 8:24 pm:

Hi James, I hope my email finds you well. A quick question please; what is a Supertrend indicator? Are you still successfully using the FOREX AVENGER system? Thank you for publishing such useful information and I look forward to receiving your emails.
Warm regards Ezmai

December 9, 2009

Andy Medlam @ 10:05 pm:

Great article and content on blog…

Like yourself I have a strong passion in making money through the channels of forex trading plus just making money on the internet…

Thanks again and i'm sure to be back soon
(Famous words!)

Andy

December 10, 2009

Matt @ 10:19 pm:

Hey James,
Nice trade. I wanted to share my analysis on the GBP/JPY daily chart. I believe we have found support around 139.50's and the recent swing high, on the 4th of Dec was higher then the ensuing bear move. Meaning we are going to head higher from here. Today's candle is slightly bullish as well. Higher low and closed higher then yesterday's close. This is just my "view" I trade shorter time frames and take what "I SEE."

http://trading-system-strategies.com/wp-content/uploads/2009/12/gbpjpytrade1212.gif - Chart I am talking about.

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