The Fx market remains stuck in the already established ranges as everyone and their mother is waiting for the Fed to provide fresh guidance at next Wednesday's meeting (September 22). As we said in our previous newsletter, the choppy, rangebound price action was to be expected as this Fed event is simply too important for Fx traders to overlook. 

In the meantime, for this week, we turn to a short-term tactical trade on GBPJPY that could potentially give us a 50 - 100 pips upside move. The trade is mainly based on a technical setup, which suggests GBPJPY may extend the rebound toward the 152.00 price zone.

GBPJPY bounced this morning almost exactly at the 151 round number level, confirming the second low in this area over the last two days. There is potential for a double bottom pattern to be confirmed here - for which GBPJPY needs to break above the local highs around 151.50. Accordingly, if that happens, it will then open the potential for further upside toward the 152.00 area, which is also the projected target of the double bottom pattern.

A reaction is likely if/when the price reaches the 151.50 resistance zone, hence taking off a part of your positions here makes sense. For the entries, we look to enter closer to the 151.00 low, though the market may not give this opportunity.

The oversold stochastic (see chart below) that confirmed the 151.00 low also provides extra confirmation for this trade. If GBPJPY breaks above the 151.50 resistance, then it should reach the 152.00 zone as well (our target) as there is little resistance on the way between the two levels.

Entries: 

• Look to enter lower at cheaper levels, e.g., nearer to 151.00 level or below;
• However, if that doesn't happen, then entries on a breakout above 151.50 would be plan B; preferably, in this case entries will be closer to the 151.50 level of below (e.g., on a "break - retest from other side - continuation" scenario)

Stop: 

• Below 151.00;
• Placing the stop below yesterday's low at 150.80 would allow more room for the trade to work without being stopped out

Target:

• 152.00 

• Long USDCHF from 0.9050, closed at 0.9240 = +190 pips profit, trade idea sent on June 18 and triggered on August 5 ; Trade was closed way ahead of 0.95 target due to increased uncertainty surrounding the Fed event next week and the German elections on Sept 26. At a future time, it may be appropriate to enter long USDCHF again and we’ll keep monitoring the developments in this space.