Update: AUD/CHF To Resume Uptrend?

Last updated 8/5/2009 7:37 PM EST (GMT -5) 0 Comments - Add your comment

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.

Bradley W. Gareiss

Technical Analyst, GFT

We featured a bullish Gartley that was forming on the AUD/CHF two days ago that was invalidated because it rose about 0.8950.  However, even though the pattern was originally invalidated, the pattern still looks valid so we will put this trade idea back on.  It may not be exciting to look at this pattern again, but it is necessary to add this trade again.  It also doesn't hurt that there are no new patterns near completion today.

The AUD/CHF has been rising in a steady uptrend for the past several weeks.  Lately the pair has stalled, and may drop in the shape of a bullish Gartley pattern.  The trade would have decent price symmetry and so far is moving with above average time symmetry.  Otherwise, this pattern is pretty simple and straightforward.  There aren't very many extras, but that doesn't mean this is not a high probability trade setup.

We are looking to buy the AUD/CHF if the pair falls to 0.8845 (Point D).  Point D is located at the convergence of the following levels:

We will now go over what to watch for assuming the pair continues falling toward our entry at 0.8845.  If the pair moves down rapidly and has long bars near point D, we will not enter 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 0.8990 before hitting our entry.

To recap, we will look to buy the AUD/CHF at 0.8845 with our stop placed at 0.8812.  Our initial profit targets are 0.8890 (38.2% of CD) and 0.8926 (61.8% of CD).

• • 
    
  • 4hr Chart - Uptrend.
  • 
    
  • 2hr Chart - Bullish Gartley; buy at 0.8845.

Loading...