Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

GBP/JPY in Ascending Channel — Recipe for Downtrend

November 15, 2015 (Last updated on December 8, 2015) by

Unlike its US dollar twin, GBP/JPY is preparing to make a dip lower based on the ascending channel pattern that has formed since the beginning of October. A bearish breakout from the channel would mean a return to a long-term downtrend that was active in this Forex pair since June.

See the channel bordered with the yellow lines on the chart screenshot below. The cyan line is my breakout entry level positioned at 10% of the channel’s height below the lower border. The green line is my profit target level positioned at 100% of the channel’s height below the same border. I will use the high of the breakout bar for a stop-loss or the high of the preceding bar if the breakout bar is protruding too much outside the channel. I ignore bullish breakouts from the ascending channels. Click on the image to see the big picture:

GBP/JPY - Ascending Channel Pattern on Daily Chart as of 2015-11-15

I detected this channel using the Channel Pattern Detector indicator and built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/JPY pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2015-11-24: My pending sell order was executed at 1:35 GMT today at 185.710. The stop-loss is at 186.993; the take-profit is at 182.510. The breakout looks to be strong enough for a downtrend wave formation:

GBP/JPY - Ascending Channel Pattern on Daily Chart - Post-Entry Screenshot

Update 2015-12-08 18:48 GMT: TP hit with a spike down at 13:11 GMT today. The exit price was 183.955, making the trade’s reward just slightly bigger than the original risk value:

GBP/JPY - Ascending Channel Pattern on GBP/JPY Daily Chart - Post-Exit Screenshot

If you have any questions or comments regarding this ascending channel on GBP/JPY chart, please feel free to submit them via the form below.

Leave a Reply

required
required (will not be published)
optional