In this article, we are drawing Pitchfork channels on GBPJPY
On the weekly GBPJPY chart, we can see that the pair has been rejected and broken below the 160 level which represents the middle of the first channel half. With this rejection and break the pair is now open to a test of the lower channel line 135.600 level in the coming weeks and months. This is clearly a downtrend now and we have a new leg lower opened up. The medium to long-term view is bearish and that could be invalidated only on a break above the 146 level.
Using Andrews Pitchfork tool hint: to plot Andrew’s Pitchfork on a chart, first look for three consecutive big highs or lows at the asset’s price. These key points are highlighted in the chart below.
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We have used the combination of the top-down trading analysis and the Andrews Pitchfork channels to get to a trading entry stop loss levels and targets. On the daily chart, there is a new downtrend Pitchfork channel that could lead to a test of the median Pitchfork channel line 140.280 level. Use the chance to enter a good risk to reward short trade entry with the stop loss above the 145 level, targeting 140 and 136 level lower.
Happy trading! (click on the chart to enlarge it)
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