GBPJPY appears overbought

FXCM PLUS Trading Signals

The Congestion Opportunities Strategy has just sold GBPJPY at 145.719. The system recommends entering this trade at any price between 145.404 and 146.034. The signal was issued because the 28-hour Relative Strength Index indicates that the GBPJPY may be overbought, while the Speculative Sentiment Index reading of 1.468 indicates that trader sentiment is not at extremes.The 14-period Average True Range on a daily chart is 1.259, so the stop loss has been set at 146.978. This stop loss order is a trailing stop that will move down as the market moves down. There is no profit target for this strategy. We expect to be closed by the stop loss.Congestion Opportunities is a range trading strategy that aims to sell overbought currency pairs and to buy oversold currency pairs. The strategy will only trade when the Speculative Sentiment Index for that currency pair is between -1.5 and +1.5. Limiting range trading in this way has shown in the past to significantly raise the probability of successful range trades.