Hello everyone!!! My today’s pick for the forex market is the GBP/JPY (geppy). Based on my technical analysis, the geppy could be forming a rectangle in the 4-hour chart. It has been consolidating into the mentioned chart pattern since May 14 and could break out anytime soon. Since rectangles are usually continuation patterns, I place my bets on the buy side for the bias of the trend is upward. However, a break towards the opposite direction of the trend occurs once in a while. At the current price of 156.40, I would set my upside at 158.60 (220 pips) and my downside would be the breakdown from the upward trading range @155.55 (85 pips) instead of the rectangle breakdown to tighten up my stop loss. Risk to reward ratio is around 1:2.5.
Update – 13:01 (Eastern Time): 155.55 level hit as it broke down from the trading range. Next support is @154.97 – 155.03.