We start off this Monday with an analysis of the GBPJPY pair; an instrument beloved by retail traders. They mostly praise its volatility, which can bring about fast wins, but at the same time, fast losses. The setup here is very clean and has a high chance of success.
The pair has been in a sideways trend since the 20th of September. That is, it was until Friday when we got a breakout and today, this movement is continuing. This gives us a legitimate sell signal. To be precise, the negative sentiment is based on the fact that the pair broke 4 (four!) important supports. The first one is the horizontal one (orange), which is a 23.6% Fibonacci. Then, we have the black and green lines, which are the lower lines of the sideways trend (triangle, depending on which lows you connect). The last one is the long-term upwards trend line connecting higher lows since August. The second half of the European session has brought us a small reversal, but this can be considered a typical pullback.
The pair trading being below all those levels is a proper sign to go short, and as long as that is the case here, we are negative.
