GBP/JPY Daily Price Forecast – 7th April 2025

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Trade Summary:

GBPJPY
Sell Stop @ 187.097
TP @ 186.495
SL @ 188.879

GBP/JPY Analysis (H4 Chart)

Overview

The GBP/JPY chart on the H4 timeframe shows a clear bearish trend, with the price breaking below key support levels. The chart includes a Sell Stop order at 187.097, a Stop Loss (SL) at 188.879, and a Take Profit (TP) at 186.495. The moving averages and candlestick patterns provide further confirmation of the bearish sentiment.

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Key Observations

• Trend Analysis:

  • The price is in a downtrend, as evidenced by the series of lower highs and lower lows.

  • The recent strong bearish candles indicate significant selling pressure.

• Moving Averages:

  • The red (long-term), yellow (medium-term), and green (short-term) moving averages are aligned in a bearish configuration, with the shorter-term averages below the longer-term ones.

  • The price is trading well below all the moving averages, confirming the bearish momentum.

• Support and Resistance Levels:

  • Resistance: The area around 188.879 acts as a key resistance level, where the Stop Loss is placed.

  • Support: The 186.495 level is a significant support zone, aligning with the Take Profit target.

• Sell Stop Order:

  • The Sell Stop order at 187.097 is strategically placed below the recent consolidation zone, ensuring entry only if the bearish momentum continues.

• Candlestick Patterns:

  • The recent bearish candles are large and decisive, with minimal wicks, indicating strong selling pressure.

  • No significant bullish reversal patterns are visible, further supporting the bearish outlook.

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Trade Setup

• Entry: Sell Stop at 187.097.

• Stop Loss: Placed at 188.879, above the recent resistance level, providing a buffer against potential pullbacks.

• Take Profit: Targeting 186.495, which aligns with the next support level.

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Risk-Reward Analysis

• Risk: The distance between the entry point (187.097) and the Stop Loss (188.879) is 178 pips.

• Reward: The distance between the entry point (187.097) and the Take Profit (186.495) is 60.2 pips.

• Risk-Reward Ratio: Approximately 1:0.34, which is relatively low. Traders may consider adjusting the Stop Loss or Take Profit to improve the ratio.

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Conclusion

The GBP/JPY pair is exhibiting strong bearish momentum, supported by technical indicators and price action. The Sell Stop order at 187.097 is well-placed to capitalize on further downside movement. However, the risk-reward ratio is not ideal, and traders should monitor the trade closely or adjust the levels to improve profitability.

Recommended Lot Size

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It's widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it's easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

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If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

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