Trade of the week: short GBP/JPY
We would like to go short GBP/JPY just below the psychological ¥200 resistance zone with a downside target at ¥198.10 and a tight stop at ¥200.40.
(Partial video transcript)
This week's trading opportunity
Axel Rudolph: Hello and welcome to this week's "Trade of the week" on Monday 8 September, 2025. And, today's trade is one I actually did live. I just bought some currency; I bought the Japanese yen. So, what I would like to do is to go short GBP/JPY.
If we have a look at the trading chart, you can see GBP/JPY once again testing the ¥200.00 mark psychological resistance, which held back in August, again at the beginning of September, and again today. Now, we had news out overnight that the Prime Minister in Japan resigned. That led to a lot of volatility. And the question is whether the Bank of Japan (BoJ) is going to continue on its current monetary stance or not.
And, I believe that from a technical perspective alone, the ¥200.00 area is very difficult to break through. So, personally, I bought currency because I'm going on holiday. But if I were trading, perhaps it's a risky strategy because you're risking, you have a very tight stop, but you are in a zone where, basically, GBP/JPY topped out every single time since October of last year, and even did so here, in the middle of last year in July.
So, we have to go back all the way to July of 2024 for it to not work and for the currency pair to trade above that. So, that is the idea. We would go short at current levels with a stop-loss just above today's intraday high, so a very, very tight stop. And then a downside target probably around these lows here around ¥198.10 or so for this Trade of the week.
Previous weeks' trading outcomes
I'd now like to talk about last week's "Trade of the week", which was Chris Beauchamp's, and that was absolutely perfect because he basically got in at around CAD1.3750 on the USD/CAD. And then he had an upside target around CAD1.3930 or so. But, what I am saying is perhaps get out of that long trade because, we had a very tight stop on here.
So currently, we're up around 4% and we're starting to come off now after the non-farm payrolls (NFPs) data out on Friday, which was much weaker than expected. And that could, in the future perhaps, lead to further US dollar weakness, which is why I would like to exit this "Trade of the week" by Chris Beauchamp from last week with a profit of around 4%.
And then the week before, we also had a Palladium trade on. That was mine. That one worked out really well as well. We went long here. And basically we had an upside target at $1,190.00. That got hit last week. And, we got out of that one again with a nice profit.
This week's trade in summary
So coming back to today's "Trade of the week", it is to short GBP/JPY. And to do so around current levels, just below ¥200.00, with a downside target around ¥198.10, and a stop-loss, very tight, just above today's intraday high, let's say at around ¥200.40.
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