GBPJPY has been down trending for a while in the larger context of things, but more recently it's been up trending aggressively. We have now traded into the 61.8% fib level, where large two leg corrections like this can end - often abruptly. Before making any big moves, the market tends to make spike out moves to either side. We should be aware of this, especially if selling before spike out moves.
The market often makes double bluffs in these sorts of situations, so we should be aware it can sell off into 133 without actually entering into a downtrend. This sort of move may happen, and then a spike out of the previous highs may be made. There may also just be a spike high from the ranging area we are currently in. As swing traders which of these happen is not too important. We can just set sell limits for spike outs and have high risk:reward trades.
The market often makes double bluffs in these sorts of situations, so we should be aware it can sell off into 133 without actually entering into a downtrend. This sort of move may happen, and then a spike out of the previous highs may be made. There may also just be a spike high from the ranging area we are currently in. As swing traders which of these happen is not too important. We can just set sell limits for spike outs and have high risk:reward trades.
