GBPJPY has been moving in an uptrend since mid-March, as price has been trading inside a rising trend channel visible on its 4-hour forex chart. Price has recently tested the channel support and bounced off the 171.00 major psychological level, possibly making its way back to the top of the channel.
Stochastic is heading down from the overbought zone though, suggesting that a bit of a selloff might happen. Another test of the channel support could be in the cards before price heads further north, possibly until the channel resistance at 176.00 or until the mid-channel area of interest at 173.50.
Going long at another test of channel support with a stop below 171.00 and a target of 176.00 could yield a high return-on-risk. Adjusting the stop to entry once price tests the mid-channel area of interest could be a good way to minimize exposure.
By Kate Curtis from Trader’s Way