GBP/JPY Begins to Turn on the Daily Chart
GBP/JPY begins to turn on the daily chart. This yen cross shows early reversal signals. Price action shifts after prolonged moves. Traders watch closely for confirmation.
The currency strength indicator on the daily timeframe has been signalling the UK pound as strongly overbought (yellow line) and the Japanese yen (magenta line) as oversold for some time, and today has finally seen the pair move lower following last week’s extended congestion phase in the 151 area of the chart.
This period of price action was preceded with the two bar reversal, sending an intial signal of weakness following the overreaction to hawkish comments from the BOE, with wide spread price action in the up move, not supported or validated with volume. |For any such move, volumes should have been dramatically higher, a clear sign of the lack of participation by the insiders, and signal of a trap being set. The trap has now been sprung and helped lower with weak UK economic data as the new month begins.
As we can see from the currency strength indicator on the left we have some way to go, and moving to the price chart, there is little meaningful support until we reach the volume point of control at 146, and with low volume nodes in the 148/149 area, the price action should move through here with some momentum.
Volume Price Analysis Signals
Volume price analysis (VPA) spots the turn. Look for stopping volume at lows. High volume on up candles signals buying conviction. Divergence from recent trend warns of exhaustion. Quantum indicators on NinjaTrader highlight these phases clearly.
Trading Implications
A turning GBP/JPY offers opportunities. Potential bullish reversal favors longs. Bearish continuation suits shorts. Anna Coulling’s VPA methodology validates the shift. Quantum Trend Monitor helps stay aligned with new direction.
Daily chart turns in yen crosses reward patience. Combine VPA with Quantum tools for confident entries. Watch volume for the next move.
GBP/JPY Trading: Opportunities and Dangers
GBP/JPY is one of the most exciting forex pairs. Known as “the beast” or “dragon,” it combines British pound volatility with yen safe-haven flows. This creates big moves. But with great reward comes risk. Volume price analysis (VPA) helps navigate both sides.
Opportunities in GBP/JPY
This pair offers terrific trading potential:
- High Volatility: Sharp trends from risk sentiment. London session spikes create momentum.
- Carry Trade Edge: Low yen rates vs higher GBP yields—positive carry in longs.
- Risk Sentiment Gauge: Rises in risk-on (equities up). Falls in risk-off (yen strength).
- VPA Clarity: High volume on moves confirms conviction. Quantum Trend Monitor aligns direction for sustained trades.
Quantum currency strength indicator ranks GBP vs JPY extremes. Matrix shows relational flows. These make spotting opportunities reliable.
Dangers and Risks
GBP/JPY can turn vicious:
- Yen Safe-Haven Surges: Risk-off events (equities drop) trigger sharp yen buying. Pair plunges fast.
- Whipsaws: News spikes create traps—low volume moves reverse.
- High Leverage Risk: Volatility amplifies losses. Over-leveraged positions wipe out quickly.
- VPA Warnings: Low volume at extremes signals traps. Divergence hints at reversals.
Quantum tools help avoid dangers—low volume spikes flag weakness.
Balancing Opportunities and Risks
GBP/JPY rewards prepared traders. Use VPA for confirmation—high volume validates moves. Wait for alignment. Anna Coulling’s VPA approach with Quantum indicators turns “the beast” into disciplined opportunities.
Trade GBP/JPY with respect. Quantum tools on MT5 or NinjaTrader make navigating volatility reliable. Capture upside—manage downside risks.
By Anna Coulling
Creator of Volume Price Analysis