A little while ago, I got long GBP against the EUR, AUD and NZD. You can see my analysis here. I see the potential for a significant move higher for the GBP against a number of currencies so will try to stay in those trades to catch as much of that as possible.

Today I found a nice opportunity to add to my GBP long positions, this time against the JPY.

Firstly, here's the long term chart:

This pair appears to have formed a significant reversal pattern over the last six months, and broke the neckline of resistance last week. This indicates that the GBPJPY is likely to continue to move higher over the coming weeks and months.

Now let's zoom into the daily chart to see the trade setup:

Prices have been consolidating after last week's breakout over the past two days. This gives us an opportunity to test out the long side by placing a stop order above the high of these bars, with the potential for a high reward:risk ratio if this recent momentum continues. There will be some volatility tomorrow with the FOMC announcement and Friday for the GBP with an important speech, but this trade offers a good opportunity. If we are stopped out, we will look out for the next chance to try the long side of this pair.

Long GBPJPY @ 151.6
Stop @ 150.13
Initial target 157
Reward:Risk 3.5

What do you think?

Thanks for reading, any feedback is much appreciated!

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Disclaimer: These are my ideas only and do not constitute investment advice. If you place any trades listed here you are doing so at your own risk and I hold no responsibility for any losses. Please pay attention to your risk management.