GBP/JPY – Waiting For Entry

If we look at the daily chart of GBPJPY, we can see that Friday’s candle failed to find resistance at Kijun Sen and failed to close above it. Tenkan Sen and Kijun Sen are in very close proximity to one another which suggest strong resistance at this level, and we are likely to see a bearish cross within the next few candles, indicating lower prices to come. Tenkan Sen is downward sloping, showing there is selling momentum behind the move in the short term. Additionally, Senkou Span A is converging towards Senkou Span B, where we are likely to see a bearish Kumo future start developing. Kijun Sen is flat indicating that the price may range in the medium term. Some price consolidation would be desirable, as it would establish a stronger resistance level before the anticipated downward move.

Looking at the 4-hour chart, we can see that the price found resistance at the Kumo on the penultimate candle of Friday's session, which was also a gravestone doji – a potential sign of a reversal. Tenkan Sen is upward sloping suggesting we could see a retest of the resistance provided by the Kumo. Ideally, we would want the price to remain below Senkou Span B for our short position to remain valid. The ideal entry for this trade would be a candle close below Kijun Sen on the 1-hour chart, a close approximately below 142.800.