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GBP/CHF To Resume Uptrend?

Last updated 4/21/2009 9:21 PM EST (GMT -5) 0 Comments - Add your comment

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The GBP/CHF has been trending up recently as we can clearly see on the 8hr Chart.  There is a bullish Gartley pattern forming within the context of this uptrend.  The Gartley pattern has an unusually large amount of Fibonacci convergence as there are four potential significant lows that could be point X.  The pattern would also complete near the bullish trend line if it continues to fall.  There are no sure things in trading, but this trade setup is an above average setup assuming the pattern completes as drawn.

We are looking to buy the GBP/CHF if it falls to 1.6783 (Point D).  Point D is located at the convergence of the following points:

This pattern has more levels of support in the same area than any pattern I can remember.  However, all patterns can potentially fail, so we will now go over what to watch for assuming the pair continues falling toward our entry at 1.6783.  First, we need to watch how quickly CD completes.  We are looking for the CD leg to drop slowly and enter the trade near our hypothetical entry on the 2hr Chart.  If there are long bars near the completion of the CD leg, we will not take the trade.  Also, if the pair comes within 10 pips of reaching our entry, does not enter, and reaches T1 before entering, the trade is invalid.  The trade is also invalid if the pair rises above 1.7180 before hitting our entry.

To recap, we will look to buy the GBP/CHF at 1.6783 with our stop placed at 1.6705.  Our initial profit targets are 1.6900 (38.2% of CD) and 1.6994 (61.8% of CD).

8hr Chart - Trade would enter near the bullish trend line and several Fibonacci retracement levels.	2hr Chart - Bullish Gartley; buy @ 1.6783.

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About The Author

Bradley Gareiss has been a technical analyst with GFT since 2008. Brad is known for his ability to identify high probability trading opportunities through geometric pattern recognition. He also focuses on trading psychology and risk management, and has written many extensive articles on these subjects.