GBP/JPY Awaiting Bullish Breakout
Matt Simpson | Apr 24, 2014 02:53AM ET
In the previous analysis I had hoped for a pullback the monthly pivot, as well as for a swing low to form prior to a bullish breakout. Instead we traded up to test the descending trendline,until yesterday's volatile (wide ranged) Hanging Man Reversal candle beneath this resistance line.
Indeed there is a potential for a deeper pullback, but as long as we hold above the Monthly/Weekly Pivot support zone this week then I will be seeking bullish setups to break above the descending trendline.
If we break below yesterday's low (the Hanging Man Reversal) and the support zone then I expect a deeper pullback, and will ignore this trade for the remainder of the week (as the weekly pivots will be recalculated).
At time of writing I do not see a preferable signal to take a long position as we the intraday timeframes show no signs of a basing pattern forming. So, this may be a trade to wait on the side-lines until a more decisive bullish signal presents itself. However, on the plus side we have a clear line in the sand to invalidate today's analysis - a break below the monthly pivot means we can move on and await bullish setups to appear at a lower level of support.
SUMMARY:
- - Anticipating a swing low to firm above Monthly Pivot and trade a bullish breakout
- - Break below Monthly Pivot invalidates the near-term analysis, but medium-longer term analysis remains bullish
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