GBPJPY - Potential buy trade opportunity using price action
Updated
Taking a look at the Daily chart on GBPJPY we have seen a potential level that could generate a bullish trading opportunity.
As you can see from chart, we have what looks like a possible stronger level of horizontal support around the 135.74 mark. This level has seen multiple registered hits on the line both using this level as previous support and resistance in the past. The more hits a trend line receives the stronger it can potentially become.
What can help to increase the probability of this level is that it also lines up with the 38.2% Fibonacci retracement.
As with all levels we expose as possible trading opportunities we still need to be patient and see what price does once it gets there. If price does fall to this level of convergence then we want to go down to our lower time frames and see if we first get a bounce off this price zone and then we want to look for any additional confirmation in the form of a smaller bullish price pattern or structure that could get created.
If price drives straight through this level then no action is needed to be taken.
As you can see from chart, we have what looks like a possible stronger level of horizontal support around the 135.74 mark. This level has seen multiple registered hits on the line both using this level as previous support and resistance in the past. The more hits a trend line receives the stronger it can potentially become.
What can help to increase the probability of this level is that it also lines up with the 38.2% Fibonacci retracement.
As with all levels we expose as possible trading opportunities we still need to be patient and see what price does once it gets there. If price does fall to this level of convergence then we want to go down to our lower time frames and see if we first get a bounce off this price zone and then we want to look for any additional confirmation in the form of a smaller bullish price pattern or structure that could get created.
If price drives straight through this level then no action is needed to be taken.
Trade active
Quick update on this trade idea, We have seen price come to exactly the level we posted about and started to bounce higher.As mentioned above, if you go down to your lower time frames like the 5 and 15 Minute charts you will see more detail in the price action and multiple ways in which execution was possible where 50 pips already could have been banked in so far.
We have seen a bullish 3 drive pattern and also a bullish reversal head & shoulders pattern form at the base for additional confirmation. We also have a few inner trend line breaks that could have been used for possible execution at the lows.
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