GBP/JPY short opportunity as the market structure turns bearish

GBP/JPY chart and technical analysis

The price of GBP/JPY has been dropping for the last two weeks and the price has made lower lows since then. The price has created strong resistance while dropping which indicates the bears are likely to keep dominating the market in the coming days and weeks.

The price broke below the 187.369 support level last week and retested that level before dropping further. The price would probably retrace back to the 187.788 resistance level and take out most retail traders before dropping to new lows.

I will wait for the price to retrace back to the 187.788 level before entering for short trades as it’s around the 0.5 Fibonacci level and the is also a bearish imbalance and order bloc. The price can retrace to this level while the Fed interest rates are announced tomorrow.

GBP/JPY fundamental analysis

Fundamentally, there is no major high-impact news on the Japanese yen and the Great Britain pound either, however, the Fed interest rates decision is due on Thursday which will impact the price of GBP/JPY substantially.

I would recommend watching this trade while the interest rate decision is announced.

British pound to Japanese yen trade idea takeaways

• GBP/JPY is likely to drop further as the market structure turns bearish.
•  The price of GBP/JPY is likely to drop to the 184.480 support level in the coming days.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:3.2.
• The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
• Good luck!