GBPJPY Support/Resistance short Channel break 29Jul08 – CLOSED ITM

GBPJPY Support/Resistance trade – This is really a continuation of a trade setup from last week that closed out.  We had a Channel breakout to the downside last week and traded it down to the 800 SMA on the 1 hour chart.  I then took a few probing short trades that stopped out, only to realize price was heading up to the bottom the old Channel, which is exactly where it stopped.  Now, we have some clear SR trendlines in place.  I think there is more of a chance of it breaking to the downside based on trendlines and oversold indicators.  I built a small possition overnight (was stopped out first but eventually found the correct levels) and woke up to 70+ PIPS on a small position.  I then doubled up (still below my normal trade size), and moved my SL down to 25 PIPS above the most recent SR line.  I was taken out at a 4 PIP profit – B/E.  If you look at my last GBPJPY trade idea you can see a good view of the previous Channel and subsequent break out downwards.

 After drawing the new downward TL that is now in place, I think I found the TL that price is following. I again have a small exploratory trade on that is in a tight 25 PIP range for most of the day.  If price breaks the TL and eventually the old Channel, I may consider a trade up to the old most recent high.  The current trade is short back down to the lowest most recent SR level as Target 1, and Target 2 is just above the 800 SMA on the 1 Hour.

UPDATE 29JULY08 – This trade significantly broke the channel on the upward side overnight and stopped out.  I decided to take another short probing entry this morning, all in all I have broke even less a few pips after I closed that possition once it touched the 200 and started to retrace.  I am now flat in this pair and am watching to see if the pair can close below the 200 on the 1 Hour.  If the risk reward ratio still looks good I may consider another small possition trying to get to the 800.  Otherwise this trade idea is over. 

UPATE 30July08 – This trade is closed for now.  The pair spiked up overnight and hit my stops.  I still think it is biased to the downside but unless it breaks the long term SL line on the daily, I am not going to re-enter for the time being.

 UPDATE 31July08 – Trade setup started trending down, re-opened.  Trade is hitting long term trendline.  If breaks, I believe this one will run far.  I have a small probing trade on now as the Asian session is winding down.

UPATE 1AUG08 – Pair broke through the bottom of the box and shot down to the 800 overnight.  My targets were hit and this trade is now closed.    100 PIPS while I was sleeping – nice!

Here is what the Trade setup looked like as of 1800 Monday 28Jul08:

 GBPJPY Support/Resistance trade 28July08

Updated view – showing channel break – 1800 19Jul08  

 GBPJPY Channel Trade Close 29July08

31July08 1 hour and 5 minute chart update

GBPJPY Trendline break setup - probing 1 hour 31July08            GBPJPY 5 Min view 31July08


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