As a general rule the UK sessions is most liquid, followed by the US and then Asia. Having said that, I did read a study done maybe 5 years ago from an FX broker where they found that their most profitable clients were those that were active during ...
The logic is sound and is similar to the way I look at things (multi-timeframe analysis). I would say that your stop loss is extremely close to your entry though. I am looking at shorting GBPJPY as well at the moment.