More GBP/JPY Fun: Net Results: +240 Pips

Posted on January 23rd, 2008 by Yours Truly under Forex

Another profitable trade today on my new favourite pair, the British Yen, with volatility sky rocketing today despite minor news announcements that the Bank of England is holding rates unchanged while GDP on a month-to-month basis increases slightly.
VIX volatility indicator has increased heavily today to the 30 points region which favours the Yen and Swiss safe pair as there is too much indecision going on with USD based pairs especially with the surprise rate cut yesterday.
I had USD/JPY and CAD/JPY on the lookout as well however GBP/JPY presented the best opportunity due its huge Average Daily Range. All three Yen based pairs exhibited the same pattern last night and would have resulted in a profit nonetheless.
A trade on the 4 hour time frame was taken in which the pair was trading near its 50 day SMA resistance area which provided for a huge momentum downtrend after the breakout, pullback, continuation confirmed the move to the bottom. The trigger chart on the 1 hour time frame gave the picture of a classic Head and Shoulders pattern which provided additional support to the downside.