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EUR/JPY Opportunity to Sell at 132.21

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

Last updated 10/8/2009 6:20 PM EST (GMT -5) 20 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

A bearish channel has formed on the EUR/JPY Daily Chart.  The bearish Gartley pattern may help continue the recent move down.  This pattern has nice convergence and has been slowly climbing up in the CD leg (which is a good thing).  The pattern may not complete at the top of the bearish channel, but it still would complete within a downtrend within the channel.

We are looking the sell the EUR/JPY if it rises to 132.21 (Point D).  Point D is located at the convergence of the following points:

We will now go over what to watch for assuming the pair continues rising towards our entry at 132.21.  First, we need to watch how quickly CD completes.  We are looking for the CD leg to rise slowly and enter the trade near where we have drawn the hypothetical entry.  If there are long bars near the completion of the CD leg, we will not take the trade.  Also, if the pair comes within 15 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 falls below 129.45 before hitting our entry.

To recap, we will look to sell the EUR/JPY at 132.21 with our stop placed at 132.75.  Our initial profit targets are 131.41 (38.2% of CD) and 130.72 (61.8% of CD).

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  • Daily Chart - Bearish channel.
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  • 4hr Chart - Bearish Gartley; sell at 132.21.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

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Comments (20)

Victor

October 08, 2009 at 11:44 PM ET

Hi, Brad. I am new around here. I wonder why you would prescribe a stop loss at the 38.2 retracement of the entire daily chart bear wave? Isn't that actually the perfect short entry?

bgareiss

October 12, 2009 at 06:00 PM ET

In hindsight, you might be right about that stop placement. That stop looked good within the primary pattern, but it was at the retracement you mentioned. Regardless, this trade would have been stopped out that because I would never put my stop above the point the pair reached. In fact, I probably would have put my stop a little bit lower, or I may have even tried to go short at the next level extended above where we did go short. It is really hard to say though, because most traders make different reactions after the the fact than they make beforehand. Brad

Sana

October 09, 2009 at 11:58 AM ET

hi brad...we just hit 132.21....no sure if we r still entering in this trade or not. can u pls confirm

thanks

bgareiss

October 12, 2009 at 06:01 PM ET

I was out of the office, but the trade was still valid. Brad

pp22

October 09, 2009 at 03:45 PM ET

looks like there gone for the week end, but i can tell you im in it.

arapahoe

October 09, 2009 at 04:49 PM ET

why wouldn't we enter.... too fast a move up?

bgareiss

October 12, 2009 at 06:03 PM ET

I was out of the office on Friday, but this was a valid trade that simply lost. Brad

Lj

October 09, 2009 at 05:47 PM ET

I cannot tell if the long bar invalid his trade? Anybody?
what would be consider a long bar?

thanks

anthony quarzi

October 11, 2009 at 12:09 PM ET

Hello Brad.
I`m new to FX trading. Could you please send me the answer to LJ`s question?

regards
Tony Quarzi.

pipster

October 11, 2009 at 08:19 PM ET

I think it hit 132.47, I assume we're talking about the candlestick long bar, if not please correct me. I think the trade is still valid. Let's hope, I'm in.

bgareiss

October 12, 2009 at 06:04 PM ET

As I said above, this was a valid trade that ended up losing. Brad

Jai Thomson

October 12, 2009 at 01:28 AM ET

Sopped Out...! :(

bgareiss

October 12, 2009 at 06:06 PM ET

Hey Jai. As I have said quite a bit, I really wouldn't get to down when a trade loses. If win only 50%, my risk:reward ratio still yields a high profitable result. Therefore, I don't get too excited whether these trades win or lose. Brad

fishmanszmit

October 12, 2009 at 06:16 AM ET

Hello Brad, I am on th Meta Trader4 Australia Platform. I set my trades to follow your "recommendations". This last couple of days, the CAD/JPY short, the EUR/JPY shortand the USD/CAD long all opened and all were stopped out. And they have not yet opened on your FX360 platform. How can the prices be so far off?? The CAD/JPY is at 87.21, the EUR/JPY is at 133.21, and the USD/CAD is at 103.44 as of Monday morning at 6AM EDT, all three trades well below or above the stops? How can my platform be so far off from yours? I am always impressed with the accuracy of your trades and I thank you so much for all your help. I hope you can tell me why I am so far off.

bgareiss

October 12, 2009 at 06:11 PM ET

I am not sure what you mean by saying that the prices were far off. Those three trades were all stopped out. One thing I have been writing about lately is risking less when trades are correlated. I will probably write a longer article specifically detailing my thoughts on that this week. I updated these trades when I got in today, but I was out of the office on Friday so they weren't listed as "open". If I am missing something, let me know and I will try to clarify for you, but hopefully that answers your questions. I am glad you enjoy the site. Brad

fishmanszmit

October 12, 2009 at 07:07 PM ET

What I mean by prices far off is... I assumed the trades didn't open on FX360 (because they were not updated). So I thought the current value (price) of each of the 3 currencies was different on my platform then it was on yours. I thank you for patiently answerring my novice querries. So it was just 3 trades that opened and unfortunately stopped out eh? Thanks for all of your input Brad. I am very glad to be able to work along side the pros!! Later.

bgareiss

October 12, 2009 at 07:10 PM ET

Well, plenty of trades have been stopped out besides those three. But those were three correlated trades that were stopped out since I left on Thursday. In the future I would suggest drawing the basic shape of the pattern to see where the current price is within the pattern (especially if there has been a large move since the last update to the site). Brad

pipster

October 12, 2009 at 07:26 AM ET

I know Brad trades strictly on technicals and I can understand why, but on the USD/CAD the fundamentals moved this pair in the opposite direction, oil is way up and peaked at 73.57 a barrel overnight. I have seen major economic announcements accentuate moves on pairs, and a few times it has made significant moves to stop out trades.

pipster

October 12, 2009 at 07:31 AM ET

This also effected the CAD/JPY due to oil prices.

bgareiss

October 12, 2009 at 06:15 PM ET

Major announcements can affect these trades, which is why I avoid placing trades around them. Unfortunately it is hard to update all of that on this site because I only update once or twice a day. However, I did write an article last week about my theories on trading around the news. Brad

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