GBP/JPY with two scenarios for next few days

4. Aug. 2014

Friday's drop opened up the Head and Shoulders scenario for the GBP/JPY currency pair, price managed to break and close under the neck line and so far it stays below. That would mean there's an posibility to enter short trade at current price level targeting levels close to 170 as that would be the H&S formation range. But there are few "IF" on that entry that make me cautious, First thing that we are still in the uptrend on higher time frames, also the Friday's bounce level 172,3-4 level. Then the whole 172-173 zone which worked as ressistance from March till June this year is not the best zone to short from in my opinion. But sometimes there's no place to think too much and just trade the setup which is present on Your chart so I'd say it's fine to short as long as 173 and 173,3 levels are not broken to the upside. If the price would manage to break above 173 and 173,3 levels then I'd be willing to go long with new highs as a target.