The pound has been underperforming the yen in November, with the GBP/JPY pair finding resistance at 172.00 before falling to its 164.00 lows.
Guppy is currently trading closer to the psychological level of 165.00, which is also a descending channel resistance that hasn't been breached in weeks and is close to the 50% Fibonacci retracement of the downswing from November.
GBP/JPY: Will the downward trend continue?
For those who are betting on GBP/JPY falling back to its 164.00 lows or even setting new monthly lows in the coming days, shorting at current levels would result in a good risk-to-reward ratio.
Do you believe the GBP/JPY pair is due for a bullish turn instead?
When the 200 SMA and channel resistance zones on the chart are broken, you can start purchasing.
Whatever bias you decide to trade, employ wide stops to protect yourself against the typical GBP/JPY hourly volatility.
