Waiting in the wings for a GBPJPY buy set-up

We’re currently waiting in the wings for a potential long continuation trade for GBPJPY (aka “The Twisted Sister!). As mentioned in this week’s webinar, we are waiting for price to come back and retrace to test the recently broken level of resistance at 173.54, but now as support...before continuing its march upward. This very level represents the topside of an ascending triangle, which is a bullish continuation formation – typically seen in an up-trending market.



On the 1st July 2014, we saw price breaking this level with conviction, and breakout of the ascending triangle 25% away from its nose (which is a typical feature of an ascending triangle breakout play and confirmation that the upward move “has legs”).

It is now retracing back to this newly broken level of resistance and we are anticipating it to potentially act as support, prior to another move up. Furthermore, this horizontal level coincides with a mini-trend which is making higher highs and higher lows. As the trend-line of this mini-trend intersects with our 173.54 level, it gives us an additional reason to cite this “buy zone” .

From having an idea of what we “want” price to do in advance of trading it means that we can simply wait for the market to come to us rather than chasing moves and jumping in. This is what amateurs do. If price does not “behave” the way we want and does not come to our anticipated level and give us an activator bar (ie: a low test bar)th en it’s merely a sign to us that we should stay out.